Question

the QUESTION 4 PARTNERSHIPS The information given below was extracled from the accounting records of TiMal Traders, a partiership business with Tin and Mol as partners. (20 MARKS) REQUIRED Fiepare the Statement of changes in eguity for fne vear ended 31 December 2018 using the following format: (20) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 December 2018 Total (R) Capital Accounts Mol (R) Tim (R) Balance at 1 January 2018 Changes in capital Balance at 31 December 2018 Total (R) Mol (R) Tim (R) Current Accounts Balance at 1 January 2018 Net profit for the year Interest on capital Salaries Bonus Profit Share Drawings Balance at 31 December 2018 Extract from the ledger of TiMol Traders as at 31 December 2018: Debit (R) INFORMATION Credit (R) 7000 000 600 000 Capital: Tim 80 000 Capital: Mol 20 000 Current account: Tim (01 January 2018) 480 000 Current account: Mol (01 January 2018) 520 000 Drawings: Tim Drawings: Mol

Answer 1

Statement of changes in equity:

	Tim (R)	Mol (R)	Total (R)
Capital Accounts
Balance as on 1st January 2018 (This is before considering capital contribution R 2,00,000 each; assuming the given balances as on 31st Dec. 2018 are after adjusting for these)	8,00,000	4,00,000	12,00,000
Capital Adjustment (Capital Introduced)	2,00,000	2,00,000	4,00,000
Balance As At 31st December 2018	10,00,000	6,00,000	16,00,000
Current Accounts
Balance As At 1st Jan 2018	80,000	20,000	1,00,000
Salaries for 12 months	2,88,000	3,60,000	6,48,000
Interest on capital @ 15 % per year on balance as on 1st Jan 2018	1,20,000	60,000	1,80,000
Bonus to Tim @ 5 % on 14,00,000	70,000	0	70,000
Profit Share 50% each on 5,02,000(14,00,000 - 6,48,000 - 1,80,000 - 70,000)	2,51,000	2,51,000	5,02,000
Drawings	(4,80,000)	(5,20,000)	(10,00,000)
Balance as on 31st December 2018	3,29,000	1,71,000	5,00,000