DATE: 2/5/2023 NAME:

M Hamdhan Rikaz

ASPIRE BUSINESS SCHOOL

SUBJECT: TIME: MARKS:

ACCOUNTING

Instructions
• Use black ink or ball-point pen.
• Fill in the boxes at the top of this page with your name and date.
• Answer the questions in the spaces provided – there may be more space than
you need

Advice
• Read each question carefully before you start to answer it.
• Try to answer every question.
• Check your answers if you have time at the end.

ONLINE STUDENTS:

• Students who are taking the exam online are required to turn on the camera.

• Submit the answer sheet to the respective teacher within the given time frame.
• Answer sheets are required to be sent as a scanned PDF. (Please do not attach
any individual pictures).
Eg - CamScanner.

• Any delayed submissions will not be marked under any reasons.

Question 01

Cable and Carr are in partnership sharing profits and losses equally.
Their partnership agreement also provides for the following: interest on capital at 10% per
annum Cable to have a salary of £7 000 per annum.

On 31 October 2013 the following information was extracted from the books ofaccount.
Cable Carr
£ £
Capital account balance 1 November 2012 50 000 40 000
Current account balance 1 November 2012 6 450 (Cr) 13 500 (Dr)
Drawings for the year 6 575 12 300
Net profit for the year (before appropriations) £ 37 900

(a) Prepare the partnership appropriation account for the year ended 31 October 2013.
(b) Prepare current and capital account for the year ended 31 October 2013. Balance the
account on that date and bring down the balance on 1 November 2013.

Question 02

Precious and Little are in partnership sharing profits and losses equally after paying the
partners' interest on capital at 5% per annum and paying Little an annual salary of £10 000.
On 1 October 2011 the balances on the partners’ capital accounts and current accounts
were as follows:
Capital account Current account
Precious £50 000 £13 200 Little
£35 000 £8 700 (Dr)
The profit for the year ended 30 September 2012 was £57 250.

During the year ended 30 September 2012 the partners withdrew the following
£
Precious 16 200
Little 21 000

(a) Prepare the appropriation account of the partnership for the year ended 30 September
2012
(b) Prepare current account for the year ended 30 September 2012. Balance the account
and bring the balance down to 1 October 2012.
Question 1 Answer

Appropriation Account

Net Profit 37900

(-)Interest on Capital
Cable 5000
Carr 4000 (9000)

(-) Salary
Cable 7000 (7000)
Carr

(-) Share of profit 21900

Cable 10950
Carr 10950 (21900)
0

Current Account
Cable Carr Cable Carr
B/F 13500 B/F 6450
Drawings 6575 12300 Interest on Capital 5000 4000
Salary 7000
Share of profit 10950 10950

Capital Account
Cable Carr Cable Carr
B/F 50000 40000
Question 2 Answer

Appropriation Account
Net Profit 57250

(-) Interest on Capital

Precious 2500
Little 1750 (4250)

(-) Salary
Precious
Little 10000 (10000)

(-) Share of profit 43000

Precious 21500
Little 21500 (43000)
0

Current Account
Precious Little Precious Little
B/F 8700 B/F 13200
drawings 16200 21000 Interest On Capital 2500 1750
Salary 10000
Share of profits 21500 21500

Capital Account
Precious Little Precious Little
B/F 50000 35000