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Discuss examples of control accounts. ( 4 marks ) Discuss 2 main uses of a control account. ( 4 marks ) QUESTION THREE ( Total
Discuss examples of control accounts. marks
Discuss main uses of a control account. marks
QUESTION THREE
Total marks
Alice, Amos and David are in partnership running a garage business. Included in their partnership deed are the following terms:
Profits and losses are to be shared among Alice, Amos and David in the ratio :: respectively. Interest on capital is allowed at the rate of per annum. Amos, acting as the administrative manager is entitled to an annual salary of $
On st January, their capital and current account balances were as follows:
tableCapital Accounts SCurrent Accounts SAlicedebitAmoscreditDavidcredit
By mutual agreement, David on st July increased his capital by paying a further $ into the partnership account. Alice reduced her capital by $ but kept this in the partnership as longterm loan attracting interest at per annum. Interest on the loan is to be credited to the current account.
The partners' drawings and interest charged on drawings during the year ended st December were as follows:
tableDrawings $Interest on drawings AliceAmosDavid
The trading profit before interest of the garage business for the year ended st December was $
Required:
a Prepare a profit and loss appropriation account, marks
b Partners' capital accounts, marks
c Partners' current accounts, and, marks
d Statement of financial position of the partnership firm as at st December marks
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