QUESTION 1 (15 Marks) Time left 3:10:30 Upon completing high school, Carmen decided to pursue her lifelong dream of cooking and therefore registered for a culinary course in France. She attended a very expensive private school where she learnt the art of cooking from a world renowned Chef. After her return to her home country, she decided to open her own business, starting from her parent's kitchen. She then decided to expand her business and open a restaurant in Windhoek. Lacking the money to finance the expansion, she decided to invite her friend, Pierre (a wealthy investment banker), to join her in forming a partnership called African Cuisines. Pierre agreed, and the two of them formed the partnership on 01 January 2019. Carmen was unable to contribute any money to the partnership, but was able to contribute her knowledge, culinary skills and cooking equipment. The book value of all this equipment at the inception of the partnership was N$205 000 and its fair value was N$180 000. Pierre contributed N$400 000 in cash. Profits will be shared in a ratio of 4:1 in the favour of Carmen Profits will be shared in a ratio of 4:1 in the favour of Carmen All losses incurred by the partnership will be split equally between the partners. In order to provide Pierre with an adequate return for his contribution, he will receive interest at a rate of 14% p.a. on the capital that he contributed. This interest will be paid annually in arrears on 31 December The partnership will use fixed capital accounts. Interest of 12% per annum will be charged on any drawings made by the partners. Salaries to partners will take place on a discretionary basis. Year-ends occur on 31 December. Additional information for the 2019 financial year: a) The restaurant proved to be incredibly successful, with a profit before interest of N$870 000 in 2019. b) Carmen's younger sister, Mandy, loaned N$50 000 to the partnership on 01 January 2019. Interest of 8% p.a. is payable on the loan on 31 Additional information for the 2019 financial year: a) The restaurant proved to be incredibly successful, with a profit before interest of N$870 000 in 2019. b) Carmen's younger sister, Mandy, loaned N$50 000 to the partnership on 01 January 2019. Interest of 8% p.a. is payable on the loan on 31 December each year. c) On 1 August, Carmen withdrew N$20 000 from the partnership for a deposit on a new car. This amount constituted drawings. d) On 01 October 2019 Pierre contributed a further N$100 000 capital to the business. e) A discretionary amount of N$32 000 was allocated to Carmen as a salary in December 2019. As at 31 December 2019, this amount was yet to be paid. REQUIRED: 1.1 Prepare the statement of changes in equity of African Cuisines for the financial year ended 31 December 2019. (15 Marks) QUESTION 1 (15 Marks) Time left 3:10:30 Upon completing high school, Carmen decided to pursue her lifelong dream of cooking and therefore registered for a culinary course in France. She attended a very expensive private school where she learnt the art of cooking from a world renowned Chef. After her return to her home country, she decided to open her own business, starting from her parent's kitchen. She then decided to expand her business and open a restaurant in Windhoek. Lacking the money to finance the expansion, she decided to invite her friend, Pierre (a wealthy investment banker), to join her in forming a partnership called African Cuisines. Pierre agreed, and the two of them formed the partnership on 01 January 2019. Carmen was unable to contribute any money to the partnership, but was able to contribute her knowledge, culinary skills and cooking equipment. The book value of all this equipment at the inception of the partnership was N$205 000 and its fair value was N$180 000. Pierre contributed N$400 000 in cash. Profits will be shared in a ratio of 4:1 in the favour of Carmen Profits will be shared in a ratio of 4:1 in the favour of Carmen All losses incurred by the partnership will be split equally between the partners. In order to provide Pierre with an adequate return for his contribution, he will receive interest at a rate of 14% p.a. on the capital that he contributed. This interest will be paid annually in arrears on 31 December The partnership will use fixed capital accounts. Interest of 12% per annum will be charged on any drawings made by the partners. Salaries to partners will take place on a discretionary basis. Year-ends occur on 31 December. Additional information for the 2019 financial year: a) The restaurant proved to be incredibly successful, with a profit before interest of N$870 000 in 2019. b) Carmen's younger sister, Mandy, loaned N$50 000 to the partnership on 01 January 2019. Interest of 8% p.a. is payable on the loan on 31 Additional information for the 2019 financial year: a) The restaurant proved to be incredibly successful, with a profit before interest of N$870 000 in 2019. b) Carmen's younger sister, Mandy, loaned N$50 000 to the partnership on 01 January 2019. Interest of 8% p.a. is payable on the loan on 31 December each year. c) On 1 August, Carmen withdrew N$20 000 from the partnership for a deposit on a new car. This amount constituted drawings. d) On 01 October 2019 Pierre contributed a further N$100 000 capital to the business. e) A discretionary amount of N$32 000 was allocated to Carmen as a salary in December 2019. As at 31 December 2019, this amount was yet to be paid. REQUIRED: 1.1 Prepare the statement of changes in equity of African Cuisines for the financial year ended 31 December 2019. (15 Marks)