Shoes and Socks are in partnership sharing profits and losses in the ratio 3/5: 2/5, respectively. The following is their trial balance as of 31 December 2008. Dr 2$ Cr Buildings (cost $105,000) 80,000 Fixtures at cost 4,100 Provision for depreciation: Fixtures 2,100 Debtors 30,700 Creditors 13,295 Cash at bank 3,065 Stock at 01 January 2008 Sales 31,370 181,555.50 Purchases 105,000 Carriage outwards Discounts allowed Loan interest: M. Money Office expenses Salaries and wages 1,705 310 1,950 2,380 28,904.50 Bad debts 816 Provision for doubtful debts 700 Loan from M. Money Capitals: Shoes Socks Current accounts: Shoes 32,500 50,000 37,500 2,050 Socks 600 Drawings: Shoes 15900 Book 14,100 320,300.5 320,300.5 i. Stock, 31 December 2008, $35,105 Expenses to be accrued: Office Expenses $107.50; Wages $360 Depreciate fixtures 15% on reducing balance basis, buildings $2,500 Reduce provision for doubtful debts to $625 Partnership salary: $15,000 to Shoes. Not yet entered ii. ii. iv. V. Interest on drawings: Shoes $450; Socks $300 Interest on capital account balances at 5 percent vi. vii. Required: Prepare a trading and profit and loss appropriation account for the year ended 31 Dec. 2008 a balance sheet extract showing the Financing of the business as of that date.
Shoes and Socks are in partnership sharing profits and losses in the ratio 3/5: 2/5, respectively. The following is their trial balance as of 31 December 2008. Dr 2$ Cr Buildings (cost $105,000) 80,000 Fixtures at cost 4,100 Provision for depreciation: Fixtures 2,100 Debtors 30,700 Creditors 13,295 Cash at bank 3,065 Stock at 01 January 2008 Sales 31,370 181,555.50 Purchases 105,000 Carriage outwards Discounts allowed Loan interest: M. Money Office expenses Salaries and wages 1,705 310 1,950 2,380 28,904.50 Bad debts 816 Provision for doubtful debts 700 Loan from M. Money Capitals: Shoes Socks Current accounts: Shoes 32,500 50,000 37,500 2,050 Socks 600 Drawings: Shoes 15900 Book 14,100 320,300.5 320,300.5 i. Stock, 31 December 2008, $35,105 Expenses to be accrued: Office Expenses $107.50; Wages $360 Depreciate fixtures 15% on reducing balance basis, buildings $2,500 Reduce provision for doubtful debts to $625 Partnership salary: $15,000 to Shoes. Not yet entered ii. ii. iv. V. Interest on drawings: Shoes $450; Socks $300 Interest on capital account balances at 5 percent vi. vii. Required: Prepare a trading and profit and loss appropriation account for the year ended 31 Dec. 2008 a balance sheet extract showing the Financing of the business as of that date.
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 80DC
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:Shoes and Socks are in partnership sharing profits and losses in the ratio 3/5: 2/5, respectively.
The following is their trial balance as of 31 December 2008.
DE
$
Cr
Buildings (cost S105,000)
Fixtures at cost
80,000
4,100
Provision for depreciation: Fixtures
2,100
Debtors
30,700
Creditors
13,295
Cash at bank
3,065
Stock at 01 January 2008
Sales
31,370
181,555.50
Purchases
105,000
Carriage outwards
Discounts allowed
1,705
310
Loan interest: M. Money
Office expenses
Salaries and wages
1,950
2,380
28,904.50
Bad debts
816
Provision for doubtful debts
700
Loan from M. Money
Capitals: Shoes
Socks
32,500
50,000
37,500
Current accounts: Shoes
2,050
Socks
600
Drawings: Shoes
Вook
15900
14,100
320,300.5
320,300.5
i.
Stock, 31 December 2008, $35,105
Expenses to be accrued: Office Expenses $107.50; Wages $360
Depreciate fixtures 15% on reducing balance basis, buildings $2,500
Reduce provision for doubtful debts to $625
Partnership salary: $15,000 to Shoes. Not yet
ii.
iii.
iv.
V.
entered
Interest on drawings: Shoes $450; Socks $300
Interest on capital account balances at 5 percent
vi.
vii.
Required:
Prepare a trading and profit and loss appropriation account for the year ended 31 Dec. 2008
a balance sheet extract showing the Financing of the business as of that date.
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