Craven233
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- 7/12/16
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Britney, Justin and Cameron are in partnership selling CDs and DVDs via their website Bigstars.com. In the partnership agreement, it was agreed that the three will share profits in the ratio of 5:3:2 respectively. Below is the information on their capital and current account balances as at 01 January 2015.
[TBODY] [/TBODY]The partnership agreement also indicates that an interest rate of 15% per annum is allowed on the contributed capital and a salary of £9,500 will be given to Britney and Cameron for their extra services in the business.
On 1 July 2015, Justin made a personal loan of £25,000 to the partnership, which is expected to be repaid in full on 30 June 2017 and loan interest at the rate of 12% per annum was to be credited to Justin’s account every half year.
The partners had made drawings for the year of: Britney £9,000; Justin £10,000 and Cameron £17,000.
Extracts from their Trial balance at 31 December 2015 are given in the table below:
[TBODY] [/TBODY]Note:
1. Office Equipment should be depreciated at 20% per year on the reducing balance basis
2. Closing inventory amounted to £21,400
3. Allowance for receivables is to be adjusted to 5% of Trade receivables.
You are required to:
· Prepare the statement of financial performance, appropriation account, the partners’ capital and current accounts for the year ended 31 December 2015.
Capital accounts | Current accounts | |
£ | £ | |
Britney | 12,000 | 3,000 |
Justin | 20,000 | (5,000) DR |
Cameron | 18,000 | 2,800 |
On 1 July 2015, Justin made a personal loan of £25,000 to the partnership, which is expected to be repaid in full on 30 June 2017 and loan interest at the rate of 12% per annum was to be credited to Justin’s account every half year.
The partners had made drawings for the year of: Britney £9,000; Justin £10,000 and Cameron £17,000.
Extracts from their Trial balance at 31 December 2015 are given in the table below:
£ | £ | |
Office Equipment, cost | 48,300 | |
Accum. Depreciation, Office Equipment | 12,800 | |
Inventory, 1 January 2015 | 15,600 | |
Trade receivables | 68,400 | |
Allowance for receivables, 1 January 2015 | 3,200 | |
Sales Revenue | 448,700 | |
Purchases | 184,600 | |
Rent Expense | 30,000 | |
Salaries | 88,000 | |
Insurance | 4,000 | |
Sundry Expenses | 39,400 |
1. Office Equipment should be depreciated at 20% per year on the reducing balance basis
2. Closing inventory amounted to £21,400
3. Allowance for receivables is to be adjusted to 5% of Trade receivables.
You are required to:
· Prepare the statement of financial performance, appropriation account, the partners’ capital and current accounts for the year ended 31 December 2015.
