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Dave, Andrew, and Timothy have operated a partnership business for several years sharing profits and losses in the ratio 4:2:3. Interest of 6% per annum

 Dave, Andrew, and Timothy have operated a partnership business for several years sharing profits and losses in the ratio 4:2:3. Interest of 6% per annum is to be computed on the capital invested and all drawings are to be charged a per annum rate of 5%. Andrew is to be granted a monthly salary of $600 for working extra hours in the business and Timothy will receive a salary of $4,500 per annum. The partnership list of balances at December 31, 2023 is given below:

DR

CR

$

$

Land

380,000

Premises ($280,000 at cost)

210,000

Fixtures

85,625

Motor Vehicles

65,000

Accumulated Depreciation

Fixtures

14,035

Motor Vehicles

12,535

Inventory

14,500

Sales

909,050

Utilities

10,715

Purchases

305,625

Sales Returns

1,475

Import Duties

1,540

Carriage Inwards

1,435

Discounts

3,500

950

Commission Received

2,985

Administration Expenses

25,480

Accounts Receivable

38,600

Distribution Expenses

21,600

Accounts Payable

17,920

Miscellaneous Expenses

3,920

Salaries and Wages

23,500

Bad Debts

750

Capital Accounts (Jan 1, 2023)

Dave 109,000

Andrew 95,250

Timothy 85,500

Current Accounts (Jan 1, 2023)

Dave

17,585

Andrew

2,400

Timothy

16,320

Bank

56,525

Drawings (Jan 1, 2023)

Dave

5,000

Andrew

6,400

Timothy

3,800

Motor Vehicles Expenses

13,740

1,281,130

1,281,130

ADDITIONAL INFORMATION

  1. Inventory at 31 December 2023 was valued at $22,500.
  2. An allowance for doubtful debts of 5% is to be created on the receivables.
  3. Depreciation is to be charged as follows:
    1. Motor Vehicles - 20% on cost/valuation.
    2. Fixtures - 15% on the written down value.
    3. Premises - $10,500 for the period.

The following transactions were NOT recorded during the year:

  1. On 1 July 2023, Andrew loaned the partnership $20,000 to be repaid in full in 2030.
  2. On August 1, 2023 Timothy invested $35,000 cash and a motor vehicle valued at $15,000 into the partnership.
  3. Some small items of goods were purchased and paid for out of the cash $6,500.
  4. Goods costing $1,400 were returned to the suppliers but no records were made during the year.
  5. Dave and Andrew took goods from the business during the year valued at cost for personal use. These were estimated at $2,800 and $1,900 respectively. Additionally, Dave, Andrew and Timothy withdrew $3,840, $18,200, and $5,725 respectively in cash from the business.
  6. A vehicle with a book value of $1,500 was sold for $1,750 cash. The cost of the vehicle was $2,500.
  7. The value of salaries of $23,500 included the amount paid to Andrew.
  8. At the end of the year administration expenses totaling $680 were prepaid while distribution expenses of $740 were still outstanding.
  9. One of the company's vehicles is used frequently by Timothy's daughter. The cost of this usage (included in the motor vehicle expenses) is an estimated $4,400; this is to be charged personally to Timothy.

REQUIRED

(a)An Income Statement for the year ended 31 December 2023.

(b)The partners' drawings and capital accounts using columnar format.

(c)A Statement of Appropriation for the year ended 31 December 2023.

(d)The partners' current accounts using columnar format.

(e)The Statement of Financial Position of the partnership at 31 December, 2023.

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