1. The current account of Tina Arena has a balance at the beginning of the financial year of £550 debit.
During the course of the year the following transactions take place:
Interest on capital £900
Salary £10,000
Drawings £14,000
Profit share £4,230
What is the balance at the end of the year? £580 CR
2. Marcella and Tomlin are in partnership sharing profits and losses 60% 40% respectively. At the beginning of the FY the balances of their current accounts were £6,200Cr and £2,850Cr respectively. During the year they took drawings of £1,500 and £1,600 respectively, and a loss of £7,000 was recorded before appropriation. What are their balances at the end of the FY? Marcella £500Cr, Tomlin £1550Dr.
3. Lysa and Robin are in partnership and own a shop. The following figures are extracted from their accounts for the year ended 31 Dec X8. Show the capital and current accounts for the end of the FY.
£Capital accounts as at Jan X8
Lysa / 50,000 / Cr
Robin / 40,000 / Cr
Capital accounts as at Jan X8
Lysa / 420 / Cr
Robin / 1,780 / Cr
Drawings
Lysa / 13,000
Robin / 12,250
Interest on drawings
Lysa / 300
Robin / 250
Interest on capital
Lysa / 2,500
Robin / 2,000
Profit Share
Lysa / 9,300
Robin / 9,300
Neither partner receives a salary.
Capital Lysa 50,000 CR, Robin 40,000Cr
Current Lysa - £1080 Dr, Robin £580Cr.
4. JoJon and Meera are in partnership owning a taxidermy shop. The following trial balance has been taken from their accounts year ended Dec X5.
Dr / Cr£ / £
Capital accounts / 38,000
JoJon / 32,000
Meera
Current accounts
JoJon / 3,000
Meera / 1,000
Drawings
JoJon / 10,000
Meera / 22,000
Sales / 174,000
Cost of sales / 85,000
Rent & rates / 7,500
Advertising / 12,000
Heat & light / 3,500
Wages & salaries / 18,000
Sundry expenses / 4,000
Shop fittings at cost / 20,000
Closing inventory / 35,000
Bank / 29,000
Trade receivables / 6,000
Trade payables / 8,000
VAT / 2,000
255,000 / 255,000
Notes:
Depreciation is to be charged at 10% for shop fittings
Meera receives a partnership salary £15,000
Interest on capital accounts are JoJon £3,800 and Meera £3,200
Remaining profits and losses are shared equally.
a. Prepare the capital and current accounts for the year ended 31 Dec X5.
Capital as above.
Current: JoJon £800 Dr (bal c/d) Meera £7,200 Dr (bal c/d)
b. Prepare the partnership financial statements for the year ended 31 Dec X5.
SoPL – profit is £42,000.
After appropriation £20,000
Balancing figure is £78,000
5. Prepare the current accounts for the business partnership of Bill, Charlie and Fred.
The financial year ends on 31 March:
Salaries / Capital / Interest on Capital / Profit share / Drawings£ / £ / £ / % / £
Bill / 20,500 / 30,000 / 1,500 / 40 / 30,000
Charlie / 14,500 / 40,000 / 2,000 / 40 / 25,000
Fred / 10,250 / 20,000 / 1,000 / 20 / 14,000
Prepare the partnership accounts. Enter zeros where appropriate and clearly show the balance c/d.
Bal c/d: Bill £800, Charlie £1,200 Fred £1,450 all debit.
6. Prepare the financial statements for Dom and Jolly for the year ended 31 March X2. All the necessary adjustments have been made except for the transfer of profit to the current accounts of the partners.
The balances of the partners’ current accounts are:
Dom - £750 Cr
Jolly £400 Dr
Each partner is entitled to a £4000 profit share.
Calculate the balance of each partners’ current account after sharing the profit.
Dom / £4750Jolly / £3600
Using the trial balance underneath prepare the statement of financial position, use the current account balances that you have just calculated.
Dom & Jolly Partnership
Dr £ / Cr £Accruals / 550
Admin expenses / 28,180
Allowance for doubtful debts / 1,100
Allowance for doubtful debts adjustment / 110
Bank / 11,520
Capital account – Dom / 25,000
Capital account – Jolly / 20,000
Cash / 150
Closing inventory / 15,790 / 15790
Current account Dom / 750
Current account Jolly / 400
Depreciation / 3,250
Disposal of non current assets / 650
Machinery at cost / 35,500
Machinery accumulated depreciation / 12,150
Opening inventory / 11,650
Purchases / 70,250
PLCA / 18,720
Sales / 125,240
SLCA / 25,690
Selling expenses / 18,940
VAT / 2,780
TOTALS / 222,080 / 222,080
Balancing figures £53,350