Question

QUESTION 4 PARTNERSHIPS The information given below was extracted from the accounting records of Waltons Traders, a partnership business with Walker and Tonsen as partners. REQUIRED Prepare the Statement of Changes in Equity for the year ended 29 February 2016. INFORMATION Extract from the ledger of Waltons Traders as at 29 February 2016. Debit Credit 400 000 200 000 30 000 Capital: Walker Capital: Tonsen Current a/c Walker (01 March 2015) Current a/c Tonsen (01 March 2015) Drawings: Walker Drawings: Tonsen 20 000 220 000 180 000 The following must be taken into account: a) On 29 February 2016 the Profit and loss a/c reflected a net profit of R500 000. b) The partnership agreement provided for interest on capital at 15% p.a. on the balances on the capital accounts. The partners increased their capital contributions by R50 000 each on 01 June 2015. The capital changes have been recorded. c) The partners are entitled to the following monthly salaries from 01 March 2015 to 30 November 2015: Walker R13 000 Tonsen R11 000 The salaries of the partners were increased by 10% with effect from 01 December 2016. d) The balance of the profit/loss must be shared equally between the partners.

Answer 1

capital accounts Walker balance at 1 march 2015 | $ 350,000 change in capital $ 50,000 balance at 29 february 2016 $ 400,000 Tonsen $ 150,000 $50,000 $ 200,000 Total $500,000 $100,000 $ 600,000 Total $ 10,000 | current accounts | Walker Tonsen balance at 1 march 2015 $ 30,000 $20,000 net profit for the year interest on capital | $ 58,125 $ 28,125 salary $ 159,900 $ 135,300 profit share $ 59,275 $ 59,275 drawings -$ 220,000 -$ 180,000 balance at 29 february 2016 $ 27,300 $ 62,700 $ 86,250 $ 295,200 $ 118,550 $ 400,000 $90,000

for formulas and calculations, refer to the image below -

А в capital accounts Walker Tonsen balance at 1 march 2015 change in capital balance at 29 february 2016 =C6-C5 50000 400000 =D6-D5 50000 200000 Total =C4+D4 =C5+D5 =C6+D6 current accounts Walker Tonsen Total =C10+D10 -30000 20000 balance at 1 march 2015 net profit for the year interest on capital salary profit share drawings balance at 29 february 2016 =1350000*15%*3/12)+(400000* 15%*9/12) 1=(150000*15%*3/12)+(200000* 15%*9/12) =(13000*9)+(13000*1.1*3) =(11000*9)+(11000*1.1*3) =(500000-$E$12-$E$13)/2 =(500000-$E$12-$E$13)/2 -220000 |-180000 =SUM(C10:C15) =SUM(D10:D15) =C12+D12 =C13+D13 =C14+D14 =C15+D15 =SUM(E10:E15)

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