Question

QUESTION 2 STATEMENT OF CHANGES IN EQUITY (PARTNERSHIP) REQUIRED: Statement of Changes in Equity for the year ending 28 February 2018 120 Marks) Information Extract of a trial balance of MADIBA-FORD Partners as at 28 February 2018 Debt Capital: Madba Capital Ford Current account Madiba 01/03/2017 Current account Ford 01/03/2017 Drawings Madiba Drawings: Ford Credit 300 000 200 000 50 000 60 000 240 000 140 000 Take the following information into account 1. Partners monthly salaries are as follows: • Madiba R10 000 • Ford R8000 2. Partners are both entitled to a 15%pa interest on capital. Note: Madiba increased his capital by R100 000 on 01 December 2017. On the same date, Ford decreased his captal by R100 000, 3. Ford is entitled to a borus of 10% of the net proft in excess of R150 000 4. The net profit for the year amounted to R400 000 5. Profits should be shared in a ratio of partners' capital balances at the beginning of the financial year Format for Statement of Changes in Equity Statement of Changes in Equity of MADIBA FORD as a 28 February 2018 CAPITAL ACCOUNTS MADIBA FORD Balance on February 2017 TOTAL Balance on 28 February 2018 CURRENT ACCOUNTS Balance 28 February 2017 MADIBA FORD TOTAL Balance on 28 February 2018

Answer 1

Statement showing change in Equity.

A. Capital Account

PARTICULARS	MADIBA	FORD
Balance as on February 2017	440,000	440,000
(-) CAPITAL WITHDRAW AS ON 01/12/2017		100,000
(+) CAPITAL INTRODUCE AS ON 01/12/2017	100,000
(-) DRAWING (ASSUMED DRAWING MADE ON 28/02/2018)	240,000	140,000
CLOSING BALANCE AS ON 28/02/2018	300,000	200,000

B. Current Account

PARTICULARS	MADIBA	FORD
Balance as on February 2017	50,000	(60,000)
(+) Salaries	120,000	96,000
(+) Interest on Capital
MADIBA :- 440,000*15%*9/12 + 540,000*15%*3/12	69,750
FORD :- 440,000*15%*9/12 + 340,000*15%*3/12		62,250
(+)BONUS		25,000
(+)PROFIT (400,000-25,0000)/2	187,500	187,500
CLOSING BALANCE AS ON 28/02/2018	427,250	310,750

(ASSUMED DRAWING MADE ON 28/02/2018)