The following info relates to the partnership of MacDonald and Marto, who run a retail business, MaMa Traders, in Durban. The following balances, amongst others, appeared in the books of the business at the end of the current financial year, 31 July 2019: Net profit for the year Capital: MacDonald R723 000 R500 000 Current Account: MacDonald R135 000(DR) Drawings Account: MacDonald Capital: Marto Current Account: Marto R240 000 R400 000 R195 000(CR) Drawings Account: Marto R230 000 The partnership agreement stipulates the following: 1. Interest on capital is calculated at 10% per annum. 2. Interest on current account is calculated at 5% per annum. However, if the current account has a debit balance, the interest charged will be s% per annum. 3. Each partner is entitled to a monthly salary of R30 000. 4. MacDonald is entitled to a bonus of R15 000. 5. The partners share the remaining profits and losses in the ratio 3:2. 6. No interest is charged on drawings. Complete the calculations in the following table by indicating your answer in the 1" line of each calculation and then showing your workings for the year ending 31 July 2019: Calculations MacDonald Marto Interest on Capital Answer: R Answer: R Calculation: Calculation: Interest on Current Acc Answer: R Answer: R Calculation: Calculation: Salaries to partners Answer: R Answer: R Calculation: Calculation: Bonus share of Profit Answer: R Answer: R Calculation:
The following info relates to the partnership of MacDonald and Marto, who run a retail business, MaMa Traders, in Durban. The following balances, amongst others, appeared in the books of the business at the end of the current financial year, 31 July 2019: Net profit for the year Capital: MacDonald R723 000 R500 000 Current Account: MacDonald R135 000(DR) Drawings Account: MacDonald Capital: Marto Current Account: Marto R240 000 R400 000 R195 000(CR) Drawings Account: Marto R230 000 The partnership agreement stipulates the following: 1. Interest on capital is calculated at 10% per annum. 2. Interest on current account is calculated at 5% per annum. However, if the current account has a debit balance, the interest charged will be s% per annum. 3. Each partner is entitled to a monthly salary of R30 000. 4. MacDonald is entitled to a bonus of R15 000. 5. The partners share the remaining profits and losses in the ratio 3:2. 6. No interest is charged on drawings. Complete the calculations in the following table by indicating your answer in the 1" line of each calculation and then showing your workings for the year ending 31 July 2019: Calculations MacDonald Marto Interest on Capital Answer: R Answer: R Calculation: Calculation: Interest on Current Acc Answer: R Answer: R Calculation: Calculation: Salaries to partners Answer: R Answer: R Calculation: Calculation: Bonus share of Profit Answer: R Answer: R Calculation:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following info relates to the partnership of MacDonald and Marto, who run a retail business,
MaMa Traders, in Durban. The folliowing balances, amongst others, appeared in the books of the
business at the end of the current financial year, 31 July 2019:
Net profit for the year
Capital: MacDonald
Current Account: MacDonald
R723 000
R500 000
R135 000(DR)
Drawings Account: MacDonald
Capital: Marto
R240 000
R400 000
Current Account: Marto
R195 000(CR)
Drawings Account: Marto
R230 000
The partnership agreement stipulates the following
1. Interest on capital is calculated at 10% per annum.
2. Interest on current account is calculated at 5% per annum. However, if the current
account has a debit balance, the interest charged will be 8% per annum.
3. Each partner is entitled to a monthly salary of R30 000.
4. MacDonald is entitled to a bonus of R15 000.
5. The partners share the remaining profits and losses in the ratio 3:2.
6. No interest is charged on drawings.
Complete the calculations in the following table by indicating your answer in the 1* line of
each calculation and then showing your workings for the year ending 31 July 2019:
Calculations
MacDonald
Marto
Interest on Capital
Answer: R
Answer: R
Calculation:
Calculation:
Interest on Current Acc
Answer: R
Answer: R
Calculation:
Calculation:
Salaries to partners
Answer: R
Answer: R
Calculation:
Calculation:
Bonus
Share of Profit
Answer: R
Answer: R
Calculation:
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