Principles of Accounts

Grade 11
March 2022

Partnership

Bridge and Road are in partnership, sharing profits and losses in the ratio1:4
respectively. From the following information, prepare the appropriation
account for the year ended 31 December 2021.

1. Balances on capital account on 1 January 2021:

Bridge $28 000
Road $45 000

2. Interest on capital is to be paid at the rate of 4% per annum.

3. Salaries are paid as follows:

Bridge $4 500
Road $2 400

4. Net profit for the year is $16 003.

5. Interest on drawings is to be paid at the rate of 3% per annum.

6. Drawings accounts of the partners are as follows:

Drawings: Bridge
……………………………………………………………………………..
2021 $
Jan 01 Cash 1 200
Oct 01 Bank 2 000
Dec 31 Cash 500

Drawings: Road
…………………………………………………………………………………
2021 $
April 01 1 600
June 30 1 800
Sept 30 400