QUESTION 4
PARTNERSHIPS
(20)
The information given below was extracted from the accountingrecords of Salmon Traders, a partnership business with Sally andMonty as partners. The financial year ends on the last day ofFebruary each year.
REQUIRED
Prepare the following accounts in the General ledger of SalmonTraders:
4.1 Current a/c: Monty (Balance the account.)
(7)
4.2 Appropriation account (Close off theaccount.)
(13)
INFORMATION
Balances in the ledger on 28 February 2017
R
Capital: Sally
400 000
Capital: Monty
200 000
Current a/c: Sally (01 March 2016)
20 000
(DR)
Current a/c: Monty (01 March 2016)
33 000
(CR)
Drawings: Sally
200 000
Drawings: Monty
180 000
The following must be taken into account:
(a)
The net profit according to the Profit and Loss account amountedto R500 000 on 28 February 2017.
(b)
The partnership agreement makes provision for the following:
?
Interest on capital must be provided at 15% per annum on thebalances in the capital accounts. Note: Sally increased his capitalby R100 000 on 01 September 2016. Monty decreased his capital byR100 000 on the same date. The capital changes have beenrecorded.
?
The partners are entitled to the following monthly salaries:
Sally
R12 000
Monty
R13 000
Note: The partners’ salaries were increased by 10% witheffect from 01 December 2016.
?
Sally and Monty share the remaining profits or losses inthe ratio of their capital balances as at the beginning of thefinancial year
