Question

Sima and Shuly are in partnership trading as Shuma Trading, The following information relates to the partnership: Extract of balances as at 31 May 2018: Capital: Sima (1 June 2017) Capital: Shuly (1 June 2017) Current Account: Sima Current Account Shuly (Cr) Drawings: Sima 320 000 280 000 85 000 74 000 15 000 Continued on the next page 23 FAC1601/101/3/2019 Drawings: Shuly Bank (Dr) Land and Vehicles at cost (1 June 2017) Equipment at cost (1 June 2017) Accumulated depreciation: Vehicles (1 June 2017) Accumulated depreciation: Equipment (1 June 2017) Inventory 20 000 305 000 450 000 270 000 95 000 135 000 20 000 95 000 Additional information: 1. Abstract from terms of the partnership: 1.1 Interest on capital wil be calculated at 12% per annum on the opening balances 1.2 Interest wil be charged at a rate of 5% per annum on the balance of the drawings accounts at the end of the year Sima and Shuly are entitled to receive monthly salaries amounting to R8000 and R7 000 respectively 1.3 14 Partners will share profit and losses in the ratio of 3:2 respectively 2. Year-end adjustments: 2.1 On 1 March 2018, Sima made a cash contribution to the partnership amounting to R28 000. On the same date. Shuly contributed to the partnership her vehicle valued at R45 000 22 Land and buildings were revalued to R590 000 at 31 May 2018. 2.3 Depreciation for the year has not yet been provided for. It is Shuma's policy to depreciate assets as follows Vehicles: According to the straight-line method over 6 years * Equipment According to the diminishing balance method at 10% per annum. Equipment has a residual value of RS 000 24 On 31 May 2018 the net realisable value of the closing inventory was determined at R90 700 24 During the year the partners withdrew inventory, for own personal use, as follows Sima R15 000 Shuly R20 000 QUESTION 3 Which one of the following alternatives represents the correct total comprehensive income for the year for Shuma Trading as at year end? Round-off your answer to the nearest Rand. 1. R201 125 2. R196 825 3. R218 222 4. R224 667

Questiion 3

Answer 1

Total comprehensive income for the year = R196,825

Total Comprehensive income
Particulars	Amount
Profit for the year	115,000
Depreciation
Vehicle	(46,875)
Equipments	(7,000)
Dimunition in the value of inventory	(4,300)
Comprehensive income	56,825
Other Comprehensive income
L&B revaluation	140,000
Total Comprehensive income	196,825