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Alevels Edexcel Accounting Partnership Chapterwise Questions
Alevels Edexcel Accounting Partnership Chapterwise Questions
This Revision Handout includes the Questions and Answers of a total of 6 exercises!
Chapters:
Partnerships - Admission - Unit 1 (Pearson Edexcel)
Page 1 (WAC01 or WAC11) 2019 Winter
Page 3 (WAC01 or WAC11) 2019 Winter - Answer
Page 9 (WAC01 or WAC11) 2018 Summer
Page 11 (WAC01 or WAC11) 2018 Summer - Answer
Page 16 (WAC01 or WAC11) 2017 Autumn
Page 19 (WAC01 or WAC11) 2017 Autumn - Answer
Page 24 (WAC01 or WAC11) 2015 Winter
Page 26 (WAC01 or WAC11) 2015 Winter - Answer
Page 28 (WAC01 or WAC11) 2014 Winter
Page 30 (WAC01 or WAC11) 2014 Winter - Answer
Page 34 (WAC01 or WAC11) 2014 Summer
Page 36 (WAC01 or WAC11) 2014 Summer - Answer
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SECTION A
Answer BOTH questions in this section.
1 Rach and Saada are in partnership as accountants sharing profits and losses equally.
On 1 January 2018 the following were the partners’ balances:
£
Capital accounts Rach 25 000
Saada 30 000
Current accounts Rach 2 600 Cr
Saada 4 100 Cr
On 1 January 2018 Rach and Saada admitted Galenia as a partner. Galenia introduced
capital of £15 000 by cheque into the partnership.
The new partnership agreement stated:
• goodwill was valued on 1 January 2018 at £50 000. This would not be retained in
the books
• interest would be paid on the capital balances at the end of each year at the rate
of 10%
• interest would be charged on the total drawings made during the year at the rate
of 4%
• no salaries would be paid to the partners
• profits and losses would be shared by Rach, Saada and Galenia in the ratio 2:2:1
On 31 December 2018, after the first year of trading of the new partnership, the
following balances, excluding capital and current accounts, were in the books.
£
Accountancy fees received 246 400
Non-current assets (at cost)
Leasehold premises 160 000
Motor vehicles 62 000
Fixtures and computers 48 000
Provisions for depreciation
Leasehold premises 86 900
Motor vehicles 32 000
Fixtures and computers 14 000
Motor vehicles running expenses 24 350
Telephone and broadband expenses 6 200
Trade receivables 38 000
Trade payables 17 000
Computer maintenance 17 950
Insurance 30 000
Electricity and water 8 550
Marketing 15 000
Wages and salaries 75 500
6% bank loan (repayable 2022) 40 000
Drawings – Rach 10 000
Saada 7 500
Galenia 7 500
Cash and bank 2 450 Dr
2
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3
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(4)
Capital Account
Date Details Rach Saada Galenia Date Details Rach Saada Galenia
2018 £ £ £ 2018 £ £ £
1 Jan Goodwill 20 000 20 000 10 000 1 Jan Balance 25 000 30 000
All balances 1 AO2 Introduced 15 000
1 AO1
31 Balance 30 000 35 000 5 000 Goodwill 25 000 25 000
Dec
______ ______ ______ 1 AO2 Both__ _____
50 000 55 000 15 000 50 000 55 000 15 000
2019
1 Jan Balance b/d 30 000 35 000 5 000
All balances 1 AO1
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(7 000)
34 000
Share of profit Rach 13 600 (1of) AO2 All
Saada 13 600 Correct split
Galenia 6 800
(34 000)
Current Account
Date Details Rach Saada Galenia Date Details Rach Saada Galenia
2018 £ £ £ 2018 £ £ £
31 Dec Drawings 10 000 7 500 7 500 1 Jan Balance 2 600 4 100 -
All balances 1 AO1 31 In’t on 3 000 3 500 500
Dec cap
Dr’gs int 400 300 300 All balances 1 AO1
All balances 1 AO1
Profit 13 600 13 600 6 800
All balances __1 AO1
Balance __8 800 13 400 ______ Balance _____ _____ 500
19 200 21 200 7 800 19 200 21 200 7 800
2019 2019
1 Jan Balance 500 1 Jan Balance 8 800 13 400
b/d
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Non-current Assets
Cost Accumulated Carrying
depreciation value
£ £ £
Leasehold premise 160 000 94 900 65 100 (1)of AO2
Motor vehicles 62 000 38 000 24 000(1)of AO2
Fixtures and computers 44 000(1) AO2 22 400(1)of AO3 21 600
266 000 155 300 110 700(1)of AO2
Current Assets
Trade receivables 38 000-3 000+7 000 42 000(1)of AO2
Less Allowance for doubtful debts (2 100)
39 900(1) AO3
Other receivables: 2 100(1) AO2
Cash and bank 2 450 + 250 2 700 (1) AO2
44 700
Total Assets 155 400
Capital Accounts
Rach 30 000
Saada 35 000
Gallenia 5 000
70 000 (1)of AO2
Current Accounts
Rach 8 800
Saada 13 400
Gallenia (500)
21 700 (1of) AO2
Non-current Liabilities
6% Bank loan (repayable 2022) 40 000 (1) AO1
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Current Liabilities
Trade payables 17 000 (1) AO1
Other payables: (300+4 600+1 800) 6 700
(1) AO1 (1) AO1 (1) AO1 23 700
Total Capital and Liabilities 155 400
Decision
Candidates may conclude concepts and conventions are
critical for accounting or not critical for accounting.
Candidates should support that decision with an
appropriate rationale.
NOTE
Candidates are required to evaluate the use NOT to
describe particular concepts or conventions. No marks
will be awarded for descriptions of concepts and
conventions.
(12)
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6 Asanka and Bhulo are in partnership sharing profits and losses equally. The following
balances were in the books on 30 April 2017.
Capital accounts: £
Asanka 30 000
Bhulo 25 000
Current accounts:
Asanka 600 Cr
Bhulo 1 500 Dr
Additional information
(1) On 1 May 2017 Asanka and Bhulo agreed to admit Padman as a partner.
An agreement was prepared for the new partnership as follows:
• Padman would introduce capital of £20 000 by cheque.
• Goodwill was valued at £18 000. This would not be retained in the books of
the new partnership.
• Asanka would withdraw £10 000 of his capital. This would be paid by cheque
on 1 May 2017.
• Interest will be charged on drawings taken at 5% per annum.
• Asanka would be paid interest on his remaining capital at 8% per annum.
• No interest on capital would be paid to Bhulo or Padman.
• Salaries for the year would be paid to Bhulo £8 000 and Padman £10 000
• The profit (loss) sharing ratio of Asanka, Bhulo and Padman would be 2:4:3
(2) Balances in the books at 30 April 2018:
• Profit for the year £45 585
• Salaries and drawings:
Partners’ Drawings
salaries accrued taken
£ £
Asanka – 5 800
15
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Required
(a) State the rules that would apply to the following where there is no partnership
agreement:
• interest on partners’ loans
• partners’ salaries
• share of profit or loss.
(3)
(b) Prepare, for the year ended 30 April 2018, the:
(i) appropriation section of the Statement of Profit or Loss and Other
Comprehensive Income
(7)
(ii) capital accounts of Asanka, Bhulo and Padman
(7)
(iii) current accounts of Asanka, Bhulo and Padman.
(7)
(c) Evaluate the use of a formal partnership agreement.
(6)
16
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Plus
Interest on drawings
Asanka 290
Bhulo 325 (1)AO2 all
Padman 400
1 015
46 600
Interest on capital:
Asanka 2 000 (1)AO2
Salaries:
Bhulo 8 000 (1)AO1
Padman 10 000 (1)AO1
(20 000)
26 600
Share of profit:
Asanka 5 910 (1of)AO2 If ratio
correct
Bhulo 11 820
Padman 8 870 (1of)AO2
26 600
(7)
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Capital Accounts
Asanka Bhulo Padman Asanka Bhulo Padman
£ £ £ £ £ £
Goodwill 4 000 8 000(1) 6 000(1) Balance 30 000 25 000(1)
b/d
Bank 10 000(1) Bank 20 000(1)
Balance 25 000 26 000 14 000 Goodwill 9 000(1) 9 000 _____
c/d
39 000 34 000 20 000 39 000 34 000 20 000
Balance 25 000 26 000 14 000
b/d
(1of) All
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(7)
Current Accounts
Asanka Bhulo Padman Asanka Bhulo Padman
£ £ £ £ £ £
Balance 1 500 Balance 600
b/d b/d
Int on 290 325 400
dr’gs (1of)
Salaries 7 500 9 000 Int on 2 000
paid (1) cap (1of)
Drawings 5 800 6 500 8 000 Salaries 8 000 (1) 10 000
(1)
Balance 2 420 3 995 1 470 Share 5 910 11 820 8 870
c/d of pr’t (1of)
8 510 19 820 18 870 8 510 19 820 18 870
Balance 2 420 3 995 1 470
b/d
(1of)
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Decision
Candidates should conclude that a partnership
agreement in some form will be valuable.
Candidates should support that decision with an
appropriate rationale.
NOT (6)
General benefits of a partnership
Level Mark Descriptor
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SECTION A
Answer BOTH questions in this section.
1 Aaron and Bitan are in partnership, sharing profits and losses equally.
On 31 July 2016, the capital account balances of the partners were:
Aaron £50 000
Bitan £75 000
On 1 August 2016, Aaron and Bitan agreed to admit Chaman as a partner.
A Partnership Agreement was prepared as follows:
• Chaman would bring assets of £35 000 into the partnership.
• Goodwill was valued at £40 000
• Goodwill would not be retained in the books of the new partnership.
• No interest would be paid on capital.
• Interest would be charged on drawings at the rate of 5% on balances at the end
of the year.
• Salaries would be paid to Bitan £15 000 and Chaman £12 000
• Profits and losses would be shared: Aaron two-fifths ( 2/5 ); Bitan two-fifths ( 2/5 )
and Chaman one-fifth ( 1/5 ).
2
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At the end of the first year of trading, on 31 July 2017, the following balances
excluding the capital accounts remained in the books of the partnership.
£
Current accounts - 1 August 2016
Aaron 1 300 Dr
Bitan 900 Cr
Drawings - Aaron 8 000
Bitan 21 000
Chaman 16 000
Revenue 377 500
Purchases 183 200
Non-current assets (cost):
Land and buildings 100 000
Motor vehicles 80 000
Office equipment 40 000
Provision for depreciation:
Land and buildings 4 000
Motor vehicles 24 000
Office equipment 10 000
Wages and salaries 56 500
General expenses 31 000
Allowance for doubtful debts 1 500
Inventory 1 August 2016 36 500
Carriage inwards 10 300
Carriage outwards 7 450
Insurance 3 650
Rent 12 000
Rent receivable 1 750
Motor vehicles expenses 9 800
Trade receivables 48 000
Trade payables 42 050
Bank 5 000 Dr
8% bank loan (repayable December 2025) 50 000
Bank loan interest paid 2 000
3
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(5)
(i)
Capital Accounts
Aaron Bitan Chaman Aaron Bitan Chaman
£ £ £ £ £ £
Goodwill 16 000 16 000 8 000 Balance b/d 50 000 75 000
(1) AO3 (1) AO3
Balance c/d 54 000 79 000 27 000 Assets 35 000
(1) AO1
Goodwill 20 000 20 000
(1)
AO3
70 000 95 000 35 000 70 000 95 000 35 000
(5)
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(ii)
AO1 (6), AO2 (14)
AO1: Six marks for transferring balances from the list of
balances to the financial statements without amendment.
A02: Fourteen marks for adjusting balances from the list of
balances and posting correctly in the financial statements.
Aaron, Bitan and Chaman
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 July 2017
£ £
Revenue 377 500
Less
Opening inventory 36 500
Purchases 183 200
Carriage inwards 10 300 (1) AO1
230 000
Closing inventory (40 000)
Cost of sales 190 000 (1)of + w AO2
Gross profit 187 500
Plus Other income:
Rent receivable (1 750 + 750) 2 500 (1) AO2
190 000
Less
Depreciation – Land and buildings 2 000 (1) AO2
Motor vehicles 11 200 (1) AO2
Office equipment 6 000 (1) AO2
Wages and salaries 56 500 (1) AO1
General expenses (31 000 – 4 000) 27 000 (1) AO2
Allowance for doubtful debts increase 900 (1) AO2
Carriage outwards 7 450 (1) AO1
Insurance (3 650 – 600) 3 050 (1) AO2
Rent 12 000 (1) AO1
Motor vehicle expenses 9 800 (1) AO1
Bank loan interest (2 000 + 2 000) 4 000 (1) AO2
(139 900)
Profit for the year 50 100
Plus
Interest on drawings - Aaron 400 (1) AO2
Bitan 300 (1) AO2
Chaman 200 (1) AO2
900
51 000
Less
Salaries- Bitan 15 000
Chaman 12 000 (1) AO1
(27 000)
24 000
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(iii)
AO1 (2), AO2 (4)
AO1: Two marks for transferring balances from the list of
balances to the account without amendment.
A02: Four marks for recording correct calculations from
appropriation.
Current Accounts
Aaron Bitan Chaman Aaron Bitan Chaman
£ £ £ £ £ £
Balance b/d 1 300 Balance 900
b/d
Salaries paid 15 000 12 000 Salaries 15 000 12 000
(1) AO2 Both (1) AO1 Both
Drawings 8 000 6 000 4 000 Share of 9 600 9 600 4 800
(1) profit (1)of AO2 All 3
AO1
Int on 400 300 200 Balance 100
drawing (1)of AO2 All 3 c/d
Balance c/d 4 200 600
9 700 25 500 16 800 9 700 25 500 16 800
(6)
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Current Assets
Inventory 40 000 (1) AO1
Trade receivables 48 000
Less Allowance for doubtful debts (2 400)
45 600 (1)of AO3
Other receivables: (4 000 + 750 +600 5 350 (1) AO2
Bank 5 000 (1) AO1
95 950
Total Assets 258 750
Current Liabilities
Trade payables 42 050 (1) AO1
Other payables: 2 000 (1) AO2
44 050
Total Capital and Liabilities 258 750
(12)
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Decision
Candidates may decide that the decision to join the
partnership was a positive or negative move. Candidate’s
decisions must be supported by a rationale of key points in
arriving at that conclusion.
(12)
Level Mark Descriptor
0 A completely incorrect response.
Level 1-3 Isolated elements of knowledge and understanding recall
1 based.
Weak or no relevant application to the scenario set.
Generic assertions may be present.
Level 4-6 Elements of knowledge and understanding, which are
2 applied to the scenario.
Chains of reasoning are present, but may be incomplete or
invalid.
A generic or superficial assessment is present.
Level 7-9 Accurate and thorough understanding, supported
3 throughout by relevant application to the scenario.
Some analytical perspectives are present, with developed
chains of reasoning, showing causes and/or effects.
An attempt at an assessment is presented, using financial
and non-financial information, in an appropriate format and
communicates reasoned explanations.
Level 10-12 Accurate and thorough knowledge and understanding,
4 supported throughout by relevant and effective application
to the scenario.
A coherent and logical chain of reasoning, showing causes
and effects.
Assessment is balanced, wide ranging and well
contextualised using financial and non-financial information
and makes informed recommendations and decisions.
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£ £
Non-current Assets
Premises 60 000
Fixtures and fittings 26 000
86 000
Current Assets
Inventory 28 500
Trade receivables 32 400
Bank 5 600
66 500
152 500
Capital
Chock 40 000
Tamar 40 000
80 000
Current Liabilities
Trade payables 42 500
Non-current Liabilities
Bank loan 30 000
152 500
On 1 December 2014 Chok and Tamar admitted Lai as a partner and the following was agreed:
1. The goodwill of Chok and Tamar was valued at £120 000.
2. Tamar would reduce his capital by £20 000, receiving this sum by cheque.
3. Lai would bring the following assets into the new partnership:
£
Delivery vehicle 15 000
Inventory 16 000
Bank 25 000
4. Half of the bank loan would be repaid.
5. Profits and losses would be shared by Chok, Tamar and Lai in the ratio 2:1:1.
6. Goodwill would not be recorded in the books of the new partnership.
10
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Required:
(a) Prepare the:
(i) Capital Accounts of Chok, Tamar and Lai
(12)
(ii) opening Statement of Financial Position for the new partnership at
1 December 2014.
(16)
(b) Evaluate the introduction of a new partner into the business.
(4)
11
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6 (a)(i)
Capital Accounts
Chok Tamar Lai Chok Tamar Lai
£ £ £ £ £ £
Bank √ 20 000 √ Balance 40 000 40 000 √
Goodwill 60 000 √ 30 000 √ 30 000 √ Goodwill 60 000 √ 60 000 √
Balance c/d 40 000 50 000 26 000 √ Introduced / 56 000 √√
100 000 100 000 56 000 Assets 100 000 100 000 56 000
Balance b/d 40 000 50 000 26 000 √of
(12)
(ii)
Chok, Tamar and Lai
Statement of Financial Position at 1 December 2014 √ Names + title
£ £
Non-current Assets
Premises 60 000 √
Fixtures and fittings 26 000 √
Delivery vehicle 15 000 √
101 000
Current Assets
Inventory 28 500 + 16 000 44 500 √√
Trade receivables 32 400 √
76 900
177 900
Capital:
Chok 40 000 √of if unadjusted
Tamar 50 000 √of if unadjusted
Lai 26 000 √of if unadjusted
116 000
Current Liabilities
Trade payables 42 500 √
Bank 5 600 √+25 000 √ – 15 000 √-20 000 √ 4 400
Non-current Liabilities
Bank loan 15 000 √
177 900
(16)
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(b)
(Total 32 marks)
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SECTION A
1. Anthi and Keri started a partnership on 1 January 2013. On that date the partners placed the
following assets and liabilities into the business:
Anthi
Goodwill £75 000
Delivery vehicle £9 000
Inventory £16 000
Trade receivables £7 000
Trade payables £15 000
Keri
Land and building £80 000
Additional information:
(2) On 1 July 2013, Keri paid an additional £20 000 capital into the business bank account.
(3) The partnership received a £50 000, 8% bank loan on 1 April 2013. The loan is repayable in
five equal annual instalments on the 1 April of each year. The first repayment will be made on
1 April 2014.
(4) Balances, other than partners’ capital and current accounts, at 31 December 2013 were:
£
Inventory 63 000
Gross profit 103 350
Land and buildings (at cost) 80 000
Delivery vehicles (at cost) 19 000
Fixtures and fittings (at cost) 14 000
Trade payables 25 900
Trade receivables 18 300
8% Bank loan 50 000
Cash and bank 7 800
Wages and salaries 47 000
Bank loan interest 2 000
Delivery vehicle expenses 12 250
Carriage inwards 500 Cr
Sundry expenses 21 900
Drawings: Anthi 5 500
Keri 6 000
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Required:
(d) Evaluate the decision of the partners to not charge depreciation for land and buildings.
(8)
(Total 52 marks)
SECTION A
1(a)(ii)
Journal
Dr CR
£ £
Goodwill 75 000
Delivery vehicle 9 000
Inventory 16 000
Trade receivables 7 000
Trade payables 15 000
Capital Anthi 92 000 √
Land and buildings 80 000
Capital Keri 80 000 √
Opening assets and liabilities of the partnership √
(3)
Capital Anthi 45 000 √
Capital Keri 30 000 √
Goodwill 75 000
Goodwill of the partnership written off √
(3)
(b)(i)
Anthi and Keri – Statement of Comprehensive Income and Appropriation Account for the
year ended 31 December 2013
£ £
Gross profit 103 350
Less expenses:
Wages and salaries (47 000 – 15 000) 32 000 √
Loan interest (2 000 + 1 000) 3 000 √
Delivery vehicle expenses (12 250 – 650) 11 600 √
Sundry expenses 21 900 √
Depreciation – Delivery vehicles 2 800 √
Fixtures and fittings 1 200 √
Bad debts 800 √
Provision for Doubtful Debts 700 √
74 000
Profit for the year 29 350
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Interest on capital:
Anthi 2 350 √√( √of)
Keri (2 500 + 500) 3 000 √√ (√of)
5 350
Salary Anthi 15 000 √
Share of profit:
Anthi 5 400 √of if in correct ratio
Keri 3 600 √of if in correct ratio
9 000
29 350
(15)
(ii)
Capital Accounts
Anthi Keri Anthi Keri
£ £ £ £
Goodwill 45 000 30 000 √ Journal 92 000 80 000 √
Balance c/d 47 000 70 000 Bank 20 000 √
92 000 100 000 92 000 100 000
Balance b/d 47 000 70 000 √of
(4)
(iii)
Current Accounts
Anthi Keri Anthi Keri
£ £ £ £
Salary paid 15 000 √ - Interest 2 350 3 000 √ of
Drawings 5 500 6 000 √ Salary 15 000 -
Balance c/d 2 250 600 Share of profit 5 400 3 600
22 750 6 600 22 750 6 600
Balance b/d 2 250 600 √of
(4)
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(c)
Statement of Financial Position at 31 December 2013
Current assets
Inventory 63 000 √
Trade receivables 17 500 √
Less PDD 700 16 800 √of
Other receivables 650 √
Cash and Bank 7 800 √
88 250
197 250
Capital and equity:
Capital accounts:
Anthi 47 000
Keri 70 000
117 000 √of
Current accounts:
Anthi 2 250
Keri 600
2 850 √of
119 850
Creditors: due in less than one year
Trade payables 25 900 √
8% Bank loan repayment 10 000 √
Other payables (1 000 + 500) 1 500 √√
37 400
Creditors: due in more than one year
8% Bank loan 40 000 √ (√of £50,000)
40 000
197 250
(15)
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Negative
• Buildings will deteriorate with the passage of time
• Does not comply with concept of prudence, matching or going concern
• Unrealistic not to charge
• Non current assets not overstated
2 (a) £ £ £
Plus Minus Balance
Inventory count 15 600
(1) 900 √√
(2) (750) √√
(3) (500) √√
(4) 800 √√
(5) 350 √√
2 050 1 250
Adjusted inventory balance 16 400
(10)
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SECTION B
4. Hasibul and Iffath are in partnership. The following balances were extracted from their books at
31 March 2014.
£
Capital:
Hasibul 50 000
Iffath 80 000
Current accounts:
Hasibul 500 Dr
Iffath 6 500 Cr
Drawings:
Hasibul 25 000
Iffath 16 000
Non-current assets (at cost) 120 000
Provision for depreciation of non-current assets 20 000
Trade payables 19 000
8% Bank loan 15 000
Cash and bank 10 000 Dr
Inventory 31 500
Trade receivables 27 000
Profit for the year 39 500
Additional information:
P43179RA 8
MSB - Page 34
Summer 2014 www.mystudybro.com Accounting Unit 1
Past Paper This resource was created and owned by Pearson Edexcel WAC01 or WAC11
Required:
On 1 April 2014 Hasibul and Iffath admitted Jila as a partner. The following was agreed:
Required:
(c) Prepare the Statement of Financial Position for the new partnership at 1 April 2014.
(12)
Jila had been trading as a sole trader before joining the partnership.
(d) Evaluate Jila trading in a partnership compared with being a sole trader.
(4)
(Total 32 marks)
SECTION B
4 (a)(i)
Hasibul and Iffath
Appropriation Account for the year ended 31 March 2014
£ £
(6)
(b)
Goodwill Account
£ £
Capita – Hasibul 80 000 √ Capital- Hassibul 48 000 √
Iffath 40 000 √ Iffath 48 000 √
Jila 24 000 √
120 000 120 000
(5)
MSB - Page 36
Summer 2014 www.mystudybro.com Accounting Unit 1
Past Paper (Mark Scheme) This resource was created and owned by Pearson Edexcel WAC01 or WAC11
(c)
Current assets
Inventory 31 500 √ + 20 000 √ 51 500
Trade receivables 27 000 √ + 10 500 √ 37 500
Cash and bank 10 000 – 15 000 √
+ 10 500 √ + 20 000 √ 25 500 (20 500√, 30 000√, 5 000Cr√
40 500√√, 5 500√√, 15 000√√)
114 500
193 500
Equity and capital: £ £
Capital accounts:
Hasibul 50 000 +80 000 - 48 000 82 000 √of if not 50 000
Iffath 80 000 + 40 000 - 48 000 72 000
Jila 40 000 – 24 000 16 000
170 000
Current accounts:
Hasibul (2 000) √of
Iffath 6 500
Jila -
4 500
Current liabilities
Trade payables 19 000 √
193 500
(12)
d) Valid points from Jila’s point of view may include:
Positive
• Greater capital/resources available
• Specialist skills available from the other partners
• Share losses/reduce risks
Negative
• Shared, not sole, decision making/conflicts
• Joint and several liability
• Share profits
√√ per point x 2 – MAX 1 points positive and 1 points negative
(4)
(Total 32 marks)
MSB - Page 37