The following are balances of a partnership between Shoe and Lace as at 2021 December 31: DR CR Capital on 2021 January 01: S S 30 000 Shoe Lace 30 000 Current Accounts on 2021 January 01: Shoe 1500 Lace Drawings during the year were: Shoe Lace Land and building Equipment Cash at bank Bank loan 90 000 Electricity Office salaries Advertising Bad debts Provision for bad debts 700 Debtors Creditors 9.500 Provision for depreciation: Equipment 2 000 Stock on 2021 December 31 Gross profit for the year 150 000 Additional information: i. Provision for bad debts is to be increased by $50. ii. Amount for advertising included payment of $120 for 2022. iii. Electricity bill of $145 is due. iv. Equipment is to be depreciated at 20% per annum. v. Interest on capital is allowed at 20% per annum. vi. Interest on drawings is 5% per annum. vii. Profits and losses are to be shared between Shoe and Lace in the ratio 2:3. A. Prepare Profit and Loss and Appropriation Account for year ended 2021 December 31. B. Draw up Capital Accounts of the partnership. C. Draw up Current Accounts of the partnership. 200 6 000 4400 160 000 15 000 20 000 1400 40 000 30 000 700 6 000 30 000

The following are balances of a partnership between Shoe and Lace as at 2021 December 31: DR CR Capital on 2021 January 01: S S 30 000 Shoe Lace 30 000 Current Accounts on 2021 January 01: Shoe 1500 Lace Drawings during the year were: Shoe Lace Land and building Equipment Cash at bank Bank loan 90 000 Electricity Office salaries Advertising Bad debts Provision for bad debts 700 Debtors Creditors 9.500 Provision for depreciation: Equipment 2 000 Stock on 2021 December 31 Gross profit for the year 150 000 Additional information: i. Provision for bad debts is to be increased by $50. ii. Amount for advertising included payment of $120 for 2022. iii. Electricity bill of $145 is due. iv. Equipment is to be depreciated at 20% per annum. v. Interest on capital is allowed at 20% per annum. vi. Interest on drawings is 5% per annum. vii. Profits and losses are to be shared between Shoe and Lace in the ratio 2:3. A. Prepare Profit and Loss and Appropriation Account for year ended 2021 December 31. B. Draw up Capital Accounts of the partnership. C. Draw up Current Accounts of the partnership. 200 6 000 4400 160 000 15 000 20 000 1400 40 000 30 000 700 6 000 30 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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