Tasneem and Nazreen were friends with similar hobbies. they formed a partneship with a written partnership agreement to trade in pastry and related products as Tasnaz’s Pastry. The following were extracted from their accounting records; Balances in the ledger at 30 June 2021 R Capital: Tas 407000 Capital: Naz 363000 Current account: Tas credit balance at 1 July 2020 8052 Current account: Naz: debit balance at 1 July 2020 2640 Drawings : Tas 88000 Drawings : Naz 140000 Profit for the year 438636 Additional Information: The partnership agreement provides for the following that needs to be taken into account: 1. Partners are entitled to salaries as follows: • Tas – R8 000 per month, • Naz – R10 000 per month. 2. Interest on capital accounts are allowed at 12% per year on each partners capital on a pro-rata basis. Note the following that on 1 January 2021: • Tas decreased her capital account by R27 000; and • Naz increase her capital account by R17 000. 3. Interest at 10% per year is applicable to the opening balance of each partner’s current account. 4. Naz is entitled to an annual bonus equal to 2% of the profit for the year before any appropriation from the profit for the year. 5. The remaining profits or losses are shared equally. Required: Prepare the statement of changes in equity for Tasnaz’s Pastry for the year ended 30 June 2021. You may eliminate the Total column but must include an appropriation column. Show all workings. Round off all calculations to the nearest Rand. Use the following format: Statement of changes in equity Capital accounts Balance at Balance at Current accounts Appropriation Balance at Appropriations balance at ------ ------
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.
Tasneem and Nazreen were friends with similar hobbies. they formed a partneship with a written partnership agreement to trade in pastry and related products as Tasnaz’s Pastry. The following were extracted from their accounting records;
| Balances in the ledger at 30 June 2021 | R |
| Capital: Tas | 407000 |
|
Capital: Naz |
363000 |
| Current account: Tas credit balance at 1 July 2020 | 8052 |
| Current account: Naz: debit balance at 1 July 2020 | 2640 |
| Drawings : Tas | 88000 |
| Drawings : Naz | 140000 |
| Profit for the year | 438636 |
Additional Information:
The partnership agreement provides for the following that needs to be taken into account:
1. Partners are entitled to salaries as follows:
• Tas – R8 000 per month,
• Naz – R10 000 per month.
2. Interest on capital accounts are allowed at 12% per year on each partners capital on a pro-rata basis. Note the following that on 1 January 2021:
• Tas decreased her capital account by R27 000; and
• Naz increase her capital account by R17 000.
3. Interest at 10% per year is applicable to the opening balance of each partner’s current account.
4. Naz is entitled to an annual bonus equal to 2% of the profit for the year before any appropriation from the profit for the year.
5. The remaining
Required:
Prepare the statement of changes in equity for Tasnaz’s Pastry for the year ended 30 June 2021. You may eliminate the Total column but must include an appropriation column. Show all workings. Round off all calculations to the nearest Rand.
Use the following format:
Statement of changes in equity
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Capital accounts Balance at Balance at
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| Current accounts | Appropriation | ||
| Balance at |
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| Appropriations |
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| balance at |
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