Question

If a 1500 Question Ina, Meena and Deeka have been in partney las manufactures for many years. Interest len drawingo 10%pa - Teterbest in capital. u 20% p.a for the first six months and 25% for the remaining six month 2019. Ina receives a salary of $ 40ooper quarter and Deeka receive a monthly salary of RM 2,200 Profit is shared at Ao% for Ina 30% for Meena and 30% fir Deeka The following balance were produced for the year ended 31 Dec 2019 DEBT CREDIT Inventory as at 1 Jan 2019 6 4,800 Provision for baddebts at 1 Janar Electricity expenses 2100 sales and purchase 127,800 7,800 Wages and calaries 148, Goo Repairs and maintenore expenses 3,500 Insurance on Building 43,000 Carriage outwards Advertising expense 3,250 Provision for depr at 1 Janar Machinery 38,000 24,920 9,400 Current Account Ina 16oo 6910 4,200 462,600 Karriage Inwards 7,860 office Equipment Telephone charges Meena Deeka

Answer 1

INCOME STATEMENT FOR THE YEAR ENDED 31-12-2019 PARTICULARS AMOUNT PARTICULARS AMOUNT EXPENSES AMOUNT INCOME AMOUNT Opening stock 64,800 Sales 4,62,600 Purchases 1,27,800 Closing Stock 65,500 Direct expenses: |-Carriage Inwards 7,800 -Wages and Salaries 48,600 Gross Profit c/d 2,79,100 5,28,100 5,28,100 2,79,100 Interest on capital -Ina -Meena |-Deeka Salary: Ina Meena Deeka Depreciation: - Machinery Office Equipment Gross Profit b/d 20,500 Interest on drawings: 18,000 -Ina 13,500 |-Meena -Deeka 12,000 2,917 2,063 360 26,400 22,800 19,936

Insurance Electricity Expenses Repairs and Maintanence Carriage Outwards Advertising Expenses Telephone Charges General Expenses Bad Debts Profit 16,000 3,500 8,500 7,860 3,250 9,400 16,400 2,600 83,793 2,84,439 2,84,439

b)

INA (RM) PARTICULARS To Balance b/d To Drawings : Cash To Drawings : Goods To inton drawings To Balance c/d 10,000 25,000 2,917 29,701 67,617 PARTNER'S CURRENT ACCOUNTS MEENA (RM) DEEKA (RM) PARTICULARS 6,910 By Balance b/d 6,000 4,000 By Int on capita 21,500 10,400 By Salary 2,063 360 By Profit 23,375 43,368 52,938 65,038 INA (RM) 1,600 20,500 12,000 33,517 MEENA (RM) DEEKA (RM) 9,800 18,000 13,500 26,400 25,138 25,138 67,617 52,938 65,038

c)

AMOUNT AMOUNT 32,000 2,00,000 -60,800 BALANCE SHEET AS ON 31-12-2019 PARTICULARS AMOUNT PARTICULARS LIABILITIES AMOUNT ASSETS Partner's Capital Account: Prepaid Insurance -Ina 1,00,000 Machinery -Meena 80,000 Less: Accm. Depr |-Deeka 60,000 Partner's Current Account: Office Equipment -Ina 29,701 Less: Accm. Depr -Meena 23,375 -Deeka 43,368 Debtors Outstanding Electricity Exp 1,400 Less: Provision Creditors 10,000 Bank 1,24,600 -44,856 20,900 -1,672 12,000

Total insurance expense booked = 48,000
Total period = 2 yrs = 24 months
Period in current year = 8 months ( may 1 to dec 31)
Current year expense = 48,000* 8/24 = 16,000
Prepaid expense = 32,000

Depreciation:

Machinery = (180,000-38,000)*15% + (20,000*15%*6/12) = 22,800

Office Equipment = (124,600-24,920)*20% = 19,936