Question

QUESTION 4 PARTNERSHIPS [20 MARKS REQUIRED Use the information provided below to prepare the Statement of Changes in Equity for the year ended 30 June 2014. Use the following format STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014 Fuji Film Total Capital Accounts Balance at 30 June 2013 ges in capita Balance at 30 June 2014 Total Current Accounts Fuji Film ance at 30 June 2013 Net profit for the year Interest on Capital Bonus Profit Share Balance at 30 June 2014 INFORMATION Extract from the ledger of Fuji-Film Traders on 30 June 2014 Capital: Fuj 350 000 tal: Film 100 Current ac: Fu 50 000 talc: Film 20 000 Drawings: Fuji 90000 Drawings: Film 40 000 The following must be taken into account: (a) On 30 June 2014 the net profit for the year amounted to R520 000 (b) The partnership agreement makes provision for the following: Interest on capital must be provided at 12% per annum on the balances in the capital accounts for the first 6 months of the year. The nterest rate increases to 15% for the last 6 months of the year The partners are entited to the following annual salaries: Fuj R 25 000 Film R 20 000 Film is entitled to a special bonus equal to 5% of the net profit before any of the above * appropriations have been taken into account. Fuji decreased his capital contribution by R50 000 on 1 January 2014. This capital decrease has been recorded. Fuji and Film share the remaining profits or losses in the ratio of 3:2 respectively.

Answer 1

STATEMENT OF CHANGES IN EQUITY AS ON 30 JUNE 2014

CAPITAL ACCOUNTS	FUJI	FLIM	TOTAL
BALANCE AT 30JUN 2013	400000	100000	500000
CHANGES IN CAPITAL	50000	-	50000
BALANCE AT 30JUN 2014	350000	100000	450000
CURRENT ACCOUNTS	FUJI	FLIM	TOTAL
BALANCE AT 30JUN 2013	166400 (Dr. BALANCE)	153600 (Dr. BALANCE)	320000 (Dr. BALANCE)
NET PROFIT			520000
INTEREST ON CAPITAL	50250	13500	63750
SALARIES	25000	20000	45000
BONUS	-	26000	26000
PROFIT SHARE	231150	154100	385250
DRAWINGS	90000	40000	130000
BALANCE AT 30JUN 2014	50000	20000	70000

INTEREST ON CAPITAL

FIRST 6 MONTH 12% PAR ANNUAM

FUJI- CAPITAL BALANCE AS ON 31 DEC 2014 -400000*12%*6/12=24000

NEXT 6 MONTH 15% PER ANNUAM

FUJI- CAPITAL BALANCE AS ON 30JUN 2014-350000*15%*6/12=26250

TOTAL    50250

FLIM- CAPITAL BALANCE AS ON 31 DEC 2014 -100000*12%*6/12=6000

FLIM- CAPITAL BALANCE AS ON 30JUN 2014- 100000*15%*6/12=7500

TOTAL                                                                                                 13500

COMPUTATION OF PROFIT SHARE

NET PROFIT---                                                                                  520000

Less:- INTEREST ON CAPITAL- 63750

SALARIES- 45000

BONUS-   26000

DIVISIBLE PROFIT- 385,250

PROFIT SHARE OF FUJI= 385,250*3/5=                                    231,150

PROFIT SHARE OF FLIM= 385,250*2/5=                                   154,100