QUESTION BANK- 2017 PARTNERSHIPS: « Changes in ownership structure of a partnershipquestions, Exercises and Problems In Financial Aecounting CLAASEN, BOTHA AND PIENAAR STATEMENT OF FINANCIAL POSITION [AT 30 JUNE 2046 ASSETS R Non-current assets Equipment at cost 170 000 ‘Accumulated depreciation (@0 000) Motor vahicie at cost 40.000 Accumulated depreciation (10 000) ‘Goodvail Curront assets Inventory Accounts recelvable Bank EQUITY AND LIABILITIES Capital and reserves Capital accounts 360 000 ‘Oleasen 10 000 Botha 120.000 Prenaar 60.000 Rosen 108 000 Curent Habilities Accounts payable ‘Teichmann Is admitted to the partnership on 1 July 20X6. Ho is, to have a one-sixth, Tram ofthe businass, which Claasen, Botha and Pienaar are to reinaish according t0. ‘hair esting prof sharing ratio, The folowing agreement fo reached en the acimission of Teichmann: 1. The equipment is valued at A40 000. 2. Only 60% ofthe accounts recelvable are considered to be collectable 3. Alother assets and bites are considored to be fairy vated. n. Goodwit Is 10 be reported on the statemant of fnancia! postion of the new partnership. 5, Teichmann is to pay a total of F129 600 into the partnership. 6. The rosene fs to remain on the statement of financial positon of the nev partnership. 9 en 39.oncweerwnnamarennee Chapter 17 Accounting for Partnerships 17-8-1 The new profit-sheing ratio is: Claasen Botha Pienaar Telchmann a 8 5 2 3 3 2 1 6 O18 12 6 6 dj 15 10 5 6 6) none of tho above, 17-8-2 On the statement of financial position of the new partnership at 1 July 20X6, the non- current tangible assots wil be reported as: Cost Accumulated depreciation Carrying amount a) 310 000 80 000 220.000, ») 170000 - 170.000 ©) 469.000 - 469.000, 9) 210000 90 000 420.000 ®) 70000 - 70.000 17-8-3 On the admission of Teichmann to the partnership, goodwil is written up by an amount of: a) by “od 4) R317 600; @) R309 600, 17-8-4 ‘The entry to account forthe reserve on the change in partnership composition is: Dr or a) Reserve 108 000 Claasen 54000 Botha 96 coo Pienaar 18.000Questions, Exercises and Problems in Financial Accounting ram E17-6 B Baker and C Cox into partnership on the following conditions. 1. The goodwill of the business is valued at R500 000, 2. The carrying amounts of the other assets are fairy valued, 8, Ashton guarantees that all isblties at 1 January 20X6 were recorded in the accounting records, 4, Profits end losses are to be shared: Ashton one-half, Baker three-tenths, and Cox one-fth. ‘ 5. Baker is to pay A260 000 into the fm and Cox is to pay in R100 000. 6. Ashton is to withdraw sufficient funds to recluse his capital account to R500 000. 7. Baker's and Cox's distributions are to be limited to F100 000 per annum each, unit such tine as their capitals are in the same ratio to Ashton’s capital of R600 000 as the profit sharing ratio. If, however, they draw less than R100 C00 in any year, they are permitted to draw the diference in the following year, Distributions for 20X6 were: Ashton R220 000, Beker F&O 000, and Cox R85 000, ‘The profit for 20X6 disclosed in the draft accounts amounted 10 520 000 but : Qn amaunt of 90 000 owing for goods suppliad in 20X5 had inadvertently not been includiad as a fabiity in the statement of financial position at 1 January 20X@ and had ay been charged to purchases account when paid. __ R20 000 had been reaiised from the sale of inventory which, at January 20X6, had, been written off as obsolete. You are required to Propare the partners’ capital and current accounts, E17-7 Rama, Sita and Lakshmana are in partnership, sharing profits and losses in the ratio tatement of financial position at 31 December 20X8: 8:1:1. The folowing Is their s24. CHAPIER 15 ACCOUNTING FOR PARTNERSHIPS MULTIPLE CHOICE : Use the following information for questions 1 to 5. On January 1, Year 2, Jeanette, Barry, and Len dectded to form a partnership to produce and market Jeanette's newest Invention. The partners agreed to the follow- ing terms: Contributions Salaries Profit sharing ratio. Jeanoto 250,000 36,000 40% Barey 160,000 25,000 30% len 200,000 30,000 20% Interest was to be accrued at 7% on opening capital balances each year. During the year, each partner drew $20,000 from the firm. ‘At the end of Year 5, the partnership balances are as follows: Jeanote 650,000 Bacry 450,000 en 600,000 1. Assume that at the end of the Year 2, the partnership reported net Income of $156,000. Which of the following is the amount that would be reported for Jeanette's capital aecount at December 31, Year 2? a. $291,400 b. $292,100 ©, $292,400 4. $312,100 2, Assume that at the end of the Year 2, the partnership reported net income of $105,000. Which of the following Is the amount that would be reported for Barry's capital account at December 31, Year 2? a. $157,400 b. $161,000 ©. $173,600 . $17,400 Each of the next three questions should be considered independently 3, On Januaty 1, Year 6, Yvonne purchases one-half of Jeanette's interest in the pavinership for $400,000, The partners feel that the assets cannot be indivic. ually reassessed, but they want to revalue the partnership and record goodwill ‘based on Yvonne's payment. Which of the following would be reported as Len’s capital account immediately after the admission of Yvonne Into the partnership? ‘a. $500,000 b. $612,500 ©. $625,000 . $700,000CASE* ‘rpreg 15. ACCOUNTING FOR PARTNERSHIPS 25 4, On January 1, Year 6, Yvonne contributes $400,000 cash to the partnership for a 25% interest. The partners wish to use the bonus method to record Yvonne's interest, What will be the balance in Jeanette's capital account Immediately after the admission of Yvonne into the partnership? a. $610,000 b, $617,000 c. $650,000 . $800,000 5. On December 31, Year 5, Len retires. The partners agree that he should be paid $975,000, and the remaining partners wish to use the asset revaluation method and record goodwill upon Len’ retirement. What will be the balance in Barry's capital account immediately after the retirement? a. $375,000 b. $450,000 ©. $525,000 d. $550,000 ‘Mike (the plumber) had been hard to find, but when he was finally found and the faueet fixed, he had a story to tell. It seems that he had declared bankruptcy and lost his house in the process. AA year before, Mike had had enthusiastic reports of having entered a partnership with Joe (0 take on residential and commercial plumbing contracts on a larger scale, The partnership terms were agreed! upon, and the business was registered with the Nova Scotia Registrar of Joint Stock Companies. Operations had started small: a feww contracts \were completed evenings and weekends over the next few months with satisfactory prof- its, while both Mike and Joe kept their day jobs. Then Joe took ill. Without both partners able to devote sufficient effort to the business, they casually agreed to each take thelr own tools and go their separate ways. Each would complete any jobs they had entered into as if thoy were individuals. Mike had thought no more of the relationship ancl proceeded to take on a few jobs in his own name to supplement his income. Joe recovered from his illness and returned to work; but then severe illness left him unable to complete new fixed price contracts he had entered into after the oral agreement {0 end his partnership with Mike. Unable to meet the terms of his contracts, Joe was taken to court and Mike found himself also named on court documents, When a judg- "ment was reachod, Joo — divorced, with limited assets, and in poor health — was unable {to make good on the losses. Accordingly, Mike was held liable for losses associated with these contracts, as well as cout costs, Facing a judgment large enough that his salary would have been garnished by court order for up to ten years, Mike took his lawyer's advice and voluntarily declared bankruptcy. Required: In your role as Mike's friend and occasional advisor, explain to Mike "what happened’ in terms of how the characteristics of the partnership form of organization may have lec to the difficulties he faced. ‘What advice can you give Mike with respect to future business ventures? * Prepared by Poter Secord, Saint Mary's University.2G ciiapier 15 ACCOUNTING FOR PARTNERSHIPS PROBLEMS Problem 1 Problem 2 Kantor and Freeman began a partnership by Investing $104,000 and $156,000 respee- tively. During the first year of operation, the partnership earned $90,000, Required: Prepare calculations showing how the Income should be allocated to the partners under cach of the following plans for sharing net incomes and losses: (2). The partners falled to agree on a method of sharing Income. () The partners agreed to share income by allowing Kantor a $40,000 salary and Freeman a $30,000 salary, and by allocating the balance in the ratio 2:3. (©) Repeat the calculations for (b) under the assumption that Instead of the $90,000 income, the partnership experienced $20,000 loss. (@) Assume that instead of a partnership, Kantor and Freeman incorporated, with Kantor recoiving 104 shares and Freeman 156 shares. Would a division of earnings between Kantor and Freeman be necessary at year end? Explain, (CGA adapted) ‘The partnership of Dopey, Sneezy, and Grumpy was formed on January 1, Year 1. The original investments were as follows: Dopey $ 80,000 Sneezy 120,000 Grumpy 180,000 ‘According to the partnership agreement, net income or Joss will be divided among the respective partners as follows: + Salaries of $12,000 for Dopey, $10,000 for Sneezy, and $8,000 for Grumpy. +A shave of profits equal to interest at 10% to be allowed based on the partners’ ink tal Investments. + Remainder divided in the ratio 5:3:2, Additional Information + Not income of the partnership fort 380,000, + Dopey invested an additional $20,000 in the partnership on July 1, Year 1 + Grumpy withdrew $30,000 from the partnership on October 1, Year 1 + Dopey, Sneezy, and Grumpy made regular drawings against their shares of net Income during Year 1 of $10,000 each. e year ended December 31, Year 1, was Required: {@) Prepare a schedule showing the diviston of net income among the three partners. ‘Show supporting calculations in good form. (b) Prepare a schediue showing cach partner’ capital balance at December 31, Year 1 ‘Show supporting calculations in good form. (CCA adapted)Problem 3 Problem 4 ‘CHAPTER 15, ACCOUNTING FOR PARTNERSHIPS 27 Lucille and Marie have worked together for some years in the garment industry and have decided to establish their own business, in a partnership format, making high-fashion ladies’ weer: They have persuacled Marie's brother, Yves, a successful dentist, to provide them with the money they need to start the business. Lucille will contribute $15,000, ‘Marie $20,000, and Yves $200,000. Lucille and Marie will receive annual salaries of $25,000 and $30,000 respectively. There will be 159% interest on the opening balance of the capital accounts. The partners will share all residual profits equally, but Yves has agreed not to interfere inthe operations of the business. Lucille and Marie will work full: : Yves's contribution is only the $200,000 cash. Ignore any tax aspects of the situation, Requi (@) Assume that Yves is your client and that he is not knowledgeable about business andl Jas. Explain to him the sittation he is considering entering. Include in your explo- natlon two possible alternative structures or formats of the business, (©) Assume that the partnership is formed and that at the end of the frst year It has a net loss of $45,000 calculated without regard to partners’ salarles or interest, The cash withdravvals are as follows: Lucille $15,000, Marie $22,000, Yves $0. Prepare a statement of partners’ capital at the endl of the year. (6 Without regard to (b), assume that the capital account of Lucille was in a debit bal ance atthe end of the year. What ae the implications of a debit balance in a capital account balance in partnership? (CGA adapted ‘The Alexis, Bridgit, and Carole partnership was formed on January 1, Year 1, Their invest ‘ments on this date were as follows: Alexis $175,000, Bridgit 172,000 Carole 259,000 ‘They agreed that yearly net income Is to be divided as follows: + Salates: Atexis $18,000 Beidgit 14,000 Carole 16,000 + Interest of 12% on opening capltal balances each year, + Remainder in the ratio 2:3:5, During the year, each partner had drawings of $18,000, Required: (@) Prepare a statement of partners’ capl income was $ 125,300. (©) Prepare a statement of partners’ capitals for the year, assuming that the Year I net income was $90,000, for the year, assuming that the Year 1 net206 Entroduetion to Financial Accounting: Questions and Answers Question 14.1 28 Minutes Bente Joubert are in partnership and they share profits or losses in the ratio 3:2. On 1 March 20.8 their statement of financial position was As follow, ASSETS Land and butdings Vehicles Receivables Bark EQUITY AND LIABILITIES Capital Pienaar Joubert Payables Pienaar and Joubert decided to admit Kriel into the Partnership on 1 April 20.8 under the following conditions: 1 Land and buildings are revalued at R200 000, 2 Kriel will bring receivables to the value of R10 000 in from his previous entity and the balance in cash to ensure that the capital balances aren, profit-sharing ratio, 9 iy lll receive 1/6 ofthe profits in future, Pienaar and Joubert will contribute to Kul share in profit-sharing rafiot The land and buildings met appear in the rec- ord of the new partnership atthe re-valued emount with the adeaioase of Kriel Required (6) Calculate the new profit-sharing ratio. ©) epare the capital accounts in column form to reflect the admittance of Kriel under the above-mentioned conditions, (©) Prepare the statement of financial position immediately after Keiel's admittance, 9cLecture example 1.4 A and B are in partnership and share profits or losses in the ratio 3:2. The following trial balance was taken from the records of the partnership. "AB PARTNERSHIP fa balance December 20.8 Debit Groat R 8 capita A 127 000 8 73000 fon account A 30.000 Gurrent account B 20.000 Fureture and fitings at earying amount 30000 Moler vehicles ateanyng amount 35.000 {Land and butings 80.000 Invenloias 40.000 20000 0000 235000 A235 000 ‘Aaand B decided to admit C to the partnership from 1 July 20.9 on the following conditions: 1 Cwill get */s of the profits ar losses, 2. A and B will contribute in the ratio 2 1 to C’s "/s profit share. 3. C must deposit R60 000 as his capital contribution. 4 Coodvil is valued at RIS O00 but must not appear a an asset in the records of the new partnership. 5 Assets of the partnership are measured as follows: R Furniture and fittings 13.000 Motor vehicles 30000 Land and buildings 120.000 Other assets and liabilities are considered to be reasonably valued. 6 The partners agree that A and B will contribute or withdraw cash to ensure that the capital accounts of A, B and C will in future be in relation to their profit-sharing ratio. Required (9) Prepare the capital accounts of A, Band C in column form, (&) Prepare the statement of financial position of partnership A, B and C immediately after the implementation of the above-mentioned scheme,Var line rshu'p Lecture example 14.5 1 A, Band C were in partnership and shared profits or losses in the ratio 3:22, Their statement of financial position was as follows: ‘ABC PARTNERSHIP “Statement of financial postion as at 20 June 20.6 a ASSETS Non-current assets Other assets 5.000 Total non-current assets 166.00, EQUITY AND LIABILITIES Equity Caplal ‘ 30000, 5 22.000 c 12000 Total eqully 400 Ccursent fabiities Trade andoather payable 2.000 “Total eq end abies 1956 000 At the date of the statement of financial position C xetired from. the partnership and they agreed on the following: 2.1 The value of the other assets is deemed to be reasonably valued. 22 Creceived R12.000 from the partnership for his share of the net assets. 23. Aand B will receive C’s share of the profits or losses in the ratio 4:1. 4 Onthe same day A and B admitted D tothe partnership on the following conditions 3.41 ‘The other assets are valued at R81 000. 3.2 D must contribute a total amount of R24 000. 4 Alter the implementation of oth agreements, the abridged statement of financial positon ofthe new partnership 15 follows: ASSETS nes assets Bank EQUITY AND LIABILITIES Capital - 8 D Payables Required - Determine the profit-sharing ratio amongst A, Band D. pints Prepare the capital account in column form.Question 3 Jen & Jesse are partners sharing profits in proportion of 3:2 with capitals of N$40,000 and NS30,000_ respectively, + Interest on capitals agreed at 5% p.a, Jesse isto be allowed an annul salary of N$30,000, which has not been withdrawn, That means that it has also become a part of her capital. * During the year 2008 the profits for the year prior to the calculation of interest on capital but after charging Jesse’s salary amounted to N$12,000. * Aprovision of 5% of this amount is to be made In respect of the commission tothe manager. YOU ARE REQUIRED TO; Prepare an account showing the allocation of profits. (10) Question 4 Sam, Sally & Nelly are partners sharing profits and losses in the ratio 4: decided to share the profits and losses in the future in the ratio of 5:4, Sally retires; Sam & Nelly U. WIRED TO: Calculate the gaining ratio? (3)20 Introduction to Financial Accounting: Questions and Answers Question? — 36 Minutes Right, Straight and Top are in a partnership and share profits and losses in the ratio 5:32. ‘The statement of financial position as at 31 October 20.0 is as follows: RIGHT, STRAIGHT and TOP PARTNERSHIP ‘Statement of financial posiion ae at 31 October 200 8 a Land and biking 890.000 Capital: ight 105 000 Furiture 50000 Straight 183 000 Inventories 25000 Top 42000 Flecalvabios 30000 Currant account: Right 5.000 Curent account: Staight 10.000 Top 25.000 Bank 45000 Mortgage bona 800.000, Payables 20000 Aras0 000 Ft 060 000 On 31 October 200, Straight decided to withdraw from the partnership on the Following conditions: J Land and buildings ancl furniture are reyalued at R950 000 and R70 000 respectively. 2. Anallowance for bad debis must be provided for R3 000, 3. The amount owing to Straight is paid by cheque. Right and Top decide as follows: 3. Straight’s profit shate is divided between Right and Top in the ratio 1:2, 2 The revaluation value of land and buildings and furniture is maintained in the records of the new partnership. The same applies to the allowance for bad debts, 3 Inventories are measuzed at R28 000. Required (@) Calculate the profit sharing ratio of Right and Top. (b) Prepare the capital accounts of the partners in column format, (©) Prepare the statement of financial position of Right and Top after the withdrawal of Straight, 26‘souned 2a 0 potune som caver Jaye Jepewuyuowsod wpuey jo WERE a OZ alqus FaUmmUaW-sHOgE SEUNG" “038034 sues Banoo] a vo dussewed oc UBKer ya A FORDE AR HZ ANE LUO Tose so C2 SurG 06 HO FZ OTE aa Uso sDYs poe Sow aE SwRML pu SHEED (oossner ¢ nousaNO\/ ‘aaaieg Bi mae oo -deseuped waa ag w sunocoe apy fou aa ous ‘aSNOHE oooh & se cor & ‘amu coo opasbinng poe pur sae 02 _ceieng 1 vo vos pu Jo YARUAINSEunogn a an ALN W163 PEC ong 06 © 8 0 oor y aS weg eqns (00 1 supana ove port sTassv id quand 15 bo voted eave o WANES wong a LN BANE UO PLE vsbeni.z NOUSSNO + Wousand SdIHSHBNLNVd 81 WALA VHO —————————OO Tiswaeg wmca SRE o_o “SE NTE itor REL mr ES oe a0 war jEesessoesaes aus fou, “pun wag 6 Supe Hs ade © SeINed BF UO] FE HEN, (issu! 9 NoUsaNO ‘aun yee sjoon un dy 9 pos ess stab ay, Sunence feces au os paxemme 99 NOUS SELE:P PU SOG JO UEIPQUED =U aeons ge 8st eacepe ens od neu agen, sczanoR “youu so 940 a 200 anes wpe aUpe 9 gy 2 BYE Ye 0 "0 Ol ay U dussomse ag jo sg! te Be 3 ioMEReS oe "youd au. (worssipys mousse) 94 NOLLSIND 28 uy migond 2 0 oS a RES = Se a : arene cmamaramery nous) — ~sreaieg EID a ener 88Fuxoawerra: Accourava Balance on the currentaccounts: Qn 7750 sin 5 100 ren 6.600 Required Record allthe transactions abovein the general journal of Quesentee forthe year ening 0 June 20X5, (Narrations should be included) Question 26.8 Puff and Blow are in a partnership and share profits and lossesin the ratio of 3:1 Pantisadmited to the partnership. The new partnership agreement proved forthe oll Land and buildings are revalued at R12 000. The carrying value at present is 000, Obsolete inventory to the value of RI. 600 must be writen off Goodwill appears in the books of the old partnership at R3 000. On admission of Pant = goodwilis valued at R5 000. Pant must pay R10 000 in cash for his capital contribution ‘The ull R10 000 contributed by Pant must be retained inthe business No gooduill must appear onthe balancesheet of the new partnership. Patt, Blow and Pant wil share profits and losses in the ratio of 2:1:1 Required Do the necessary entries (cash included) in the general journal of Pull, Blow and Pant in ordet togiveeflect to the agreement. Question 26.9 Longand Short are in partnership, sharing profits and losses in the ratlo 3:2, Their balance sheet at 30 September 20X4 was as follows: Land and butdings at cost 160.000 Capital Long 100.000 Furniture at canying value 10.000 Short 60.000 lnventony 118000 Loonsecured by notgage over Debtors 24000 Jand & bullings 40.000 1s: Provision forbsd debs 2000 22000 Creditors 12000, Bank 2000, 212000 212,000 They did not keep proper accounting records, but you discovered the following: 1 R6 800 had been paid on the loan account. This amount inchided interest at the rate of I2%pa. 2 000 had been spent on furniture during the six months and itis desired to write off 3500 in respect of deprectation, No addition had been made co the land and buildings and no depreciation need tobe provided, ‘The bank statement showed an overdraft of RI 000, but there were outstandingcheques {otalling R600, and outstanding deposits of R900,28 Pacnsiies 6 Aprovision orbad debts of RI 500s considered adequate at 31 March 20X5 7 Longhad drawn R10 000 and Short R8 000 during the she months. 8 Theyareentitled to interest at the rate of 10% p.a. on capital Required Prepare a balance sheet, in form. for Longand Short at 31 March 20X5, Question 26.10 eter and Paul were in partnership, sh 20X5, their balance sheet was as follows: iaring profits and losses in the ratio of 2:1.On 30 fune and and ballings 100.000 Capital: Peter 150.000 hice 20000 Past 75.000 Puritre 19900 Loan: ABCBank 49000 Goodwill 30000 Creditors 14 000 twwentery 48000 Debtors 62000 Bank __9.000, 79 279.000, on Luly 20K5, they decided toadmit Gavin as apatner on the flloringterms anclconcitions © Assets were to be revalued as follows: Landand buildings 120 000 Vehicles 18000 Furniture 8.000 Goodwill 40 000 Inventory 44000 Debtors 60.000 ‘Gavin was to makea cash contribution fo a one-fith share in the partnership profit and losses, e _ Peterand Paul would henceforth share profits and losses inthe ratio of 3:2 and were to pay inor withdraw cash, in oxderto bring ther capal balances in profit sharingpropowion ‘based on Gavin's capital «¢ Goodwill ust not beshown as anasset inthe balance sheet of thenew partnership, Required 1 Journaliseallthe transactions for the events that took place in orcer to admit Gavin to the partnership. 2 Drawrup the balance sheet (in Form) ofthe new partnership immediately ater the admission of Gavin Question 26.11 ‘A. Band Carein partnership and share profits and losses in the ratio 2:2: Interestsallowed a 5% p.a.on capital, but nointerest is chargedon drawings. Band receive salaries of R10 000 each per year, which they withdraw as required. ‘The balance sheet of the partners on 30 June 20X1 was as follows:Funossenta: Accourmiia ~ Property 10000 capita A Equipment 6000 B Inventory 2.000 © Debtors 25000 Curentaccounts: A Bank 5.000 B ,oc Creditors 71 000 No proper records were kept by the partnership forthe year ended 30 June 20X2. The folloving information was, however, made available to you: | During the year R10 000 was spent on the property, which is regarded as capital expenditure, 2 Aincreased his capital by RIO 000 on | January 20X2 Creditors amounted to R30 000 on 30 june 20X2. Debiors amounted to R32 500 on 30 june 20X2 of which R2 500 should be writen off asinecoverable, 5 The value of inventory on 30 june 20x2 was R40 000. 6 On 30 june 20X2 the bank statement showed a favourable balance of R12 000, buta deposit of RI 000 was only credited in fuly and outstanding cheques amounted to 3 000. 7 Drawings for the year were: ‘A R5000 Be R750 RI0000 Required 1 Complete the current accounts (in full detain colurnnar form) in the general ledger of the partnership. Clearly show each partner's share of profit. 2 Drowup the balance sheet of the partnership at 30 june 20X2. Question 26.12 ‘The following conditions are contained in the partnership agreement of Hump andV Spring | Their capitals are to remain unchanged at the following amounts: Hjump R36 000 VSpring R18 000 2 Each partner isto receive interest on capital at 12% p.a. 3 Interest on the balances of current accounts, as they appear at the beginningof each year, isto be calculated at 10% pa. 4 Drawings are subject to 10% p.a. on daily balances. For the year ended 28 February 20X3 this is calculated as: H jump R600; V Spring R400. ‘The remainder of the profit orloss (after the abovementioned have been brought into account! is to be shared in proportion to capital, The following information conceming the year ended 28 February 20X3 was extracted from the books of the partners: Net profit, before taking into consideration the salaries of partners, interest on capital, interest on current accounts, and interest on drawings, amount to R25 765. Salaries of partners: Hjump 8200 Spring 6920 26-34— 26 Paamvenstips Deavings tthimp 6000 VShring 4000 ‘Current accounts (at 1 March. 20x2) Hump (debit balance) 4000 VSng 3 000 “eauted chonidommecttent account of the partners fo the yea ended 78 February 20X3as they Shouldappearinthe ledger Al henecessayadlustments needto be taken tteneecany Question 26.13 Zhe partnership of Alistair Bran and Cyde doesnot keep separate capital and current accounts Lorthepartnets. The partnership agreement provided forthe olowing $ Annual salaries tobe paid to AstalrRt2 000, Brian RIO 000 and Clyle RB 000 $ ictestto be allowed or chargedon opening captal account balances a 18% pa }¢ Prolits and losses to he shared inthe ratio: Alistair 2 | Brian 2 Clyde Il The undermentioned informations provided forthe inancal yearended 28| February 20x6: le Tarpon, Year before allwnghargingnterest on capita accounts butter owing {or partners’ salaries amounteitoRI5 360. Thesalrieshave nos yr boon withdrawn by the partners Allstair Brian Clyde Opening balance on capital accounts 24000 Dr 30000 cr 4.000 br | Drawings forthe year 10000 12000 6 000 iRequired: peat the partners’ capitalaccountsin the general edger ofthe partnership forthe yearended 28 February 20x6, ee