Question

QUESTION 4 PARTNERSHIPS The information given below was extracted from the accounting business with Tim and Mol as partners. REQUIRED Prepare the Statement of changes in equ following format (20 MARKS) e accounting records of TiMol Traders, a partnership changes in equity for the year ended 31 December 2018 using the (20) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED Capital Accounts Balance at 1 January 2018 Changes in capital Balance at 31 December 2018 "T FOR THE YEAR ENDED 31 December 2018 Tim (R) Mol (R) Total (R) Tim (R) Mol (R) Total (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 INFORMATION Extract from the ledger of TiMol Traders as at 31 December 2018: Debit (R) Capital: Tim Capital: Mol Current account: Tim (01 January 2018) Current account: Mol (01 January 2018) Drawings: Tim 480 000 Drawings: Mol 520 000 Credit (R) 1 000 000 600 000 80 000 20 000

Answer 1

Answer- Statement of change in equity:-

	Tim (R)	Mol (R)	Total (R)
Capital Accounts
Balance as on 1st January 2018 (Note 1)	800000	400000	1200000
Changes in Capital Adjustment (Capital Introduced)	200000	200000	400000
Balance As At 31st December 2018	1000000	600000	1600000
Current Accounts
Balance As At 1st Jan 2018	80000	20000	100000
Net profit for the year			1400000
Salaries for 12 months	288000	360000	648000
Interest on capital @ 15 % per year on balance as on 1st Jan 2018	120000	60000	180000
Bonus to Tim @ 5 % on 1400000	70000	0	70000
Profit Share 50% each on 502000(1400000 - 648000 - 180000 - 70000)	251000	251000	502000
Drawings	(480000)	(520000)	(1000000)
Balance as on 31st December 2018	329000	171000	500000

Note-1-(This is before considering capital contribution R 200000 each; assuming the given balances as on 31st Dec. 2018 are after adjusting for these)

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