Partnership agreement:

The partnership agreement stipulates the following:

a$.$ The partners Amanda and Sphindile share the profits or losses in the ratio of $3$:$2$ respectively.

b$.$ Interest at $10\%$ per annum is allowed on the opening balances of the partners$$ capital accounts.

c$.$ Amanda is entitled to a $10\%$ commission on sales.

Year$-$end adjustments:

$1.$ Inventory on hand at $31$ December $2009$:

R

Merchandise

$83000$

Stationery $($stationery purchased is recorded in the stationery consumed account$)850$

$2.$ On $30$ September $2009,$ a delivery vehicle was purchased for R$85000$ cash. All the necessary entries were

made in the books.

$3.$ Depreciation must be provided on vehicles at $10\%$ per annum according to the straight$-$line method

QUESTION TWO $(20$ MARKS$)$

$4.$ The loan from Amanda was obtained on $1$ September $2007$ at $5\%$ interest per annum. The loan will be repaid

in five equal annual instalments, starting from $31$ December $2010.$ The interest must be paid to Amanda

annually

$5.$ During the financial year Sphindile was granted an interest free loan which she agreed to settle in full on $30$

June $2010.$

$6.$ The water and electricity account of R$400$ for December $2009$ was received on $10$ January $2010.$

$7.$ A debtor owing the business R$5560$ has for the past financial year defaulted on his payments and his account

must be written off as irrecoverable. The allowance for credit losses must be adjusted to R$3200.$

$8.$ During the financial year R$40000$ was paid to Amanda as commission on sales. These payments were

recorded in the salaries and wages account

$9.$ The fixed deposit at Third National Bank was made on $1$ January $2008$ for a period of $5$ years at $9\%$ interest

per annum. The interest is receivable at the end of each borrowing year.

REQUIRED:

Prepare the statement of profit or loss and other comprehensive income of A&S Supermarket for the year

ended $31$ December $2009.$ Your answer must comply with the requirements of International Financial Reporting

Standards $($IFRS$)$ appropriate to the business of the partnership $($notes and comparative figures are not

required$).$

NB: Show all calculations