Question 2 (50 marks) FIZER, ZINO and VIRRUS have been in partnership, VAKS VAKS ENTERPRISE, for past 3 years. Following is the statement of financial position of VAKS VAKS ENTERPRISE as at 31 December 2019: Statement of financial position as at 31 December 2019 (extract) Non-Current Assets Building 250.000 Machineries 700.000 Less: Accumulated. Depreciation (200.000) 500.000 Equipment 360.000 Less: Accumulated. Depreciation (240.000) 120.000 870.000 Capital Account: FIZER ZINO VIRRUS 300.000 300.000 200.000 800.000 Current Account: FIZER ZINO VIRRUS 70.000 60.000 50.000 180.000 Their partnership agreement is provided as below: i. Interest on capital to be allowed at 10% per annum. The partners agreed to pro-rate the interest for additional capital invested or capital withdrawn during the year ii. Interest on drawings to be charged at 20% per annum iii. All 3 partners are entitled for a salary of RM30.000 per annum each. iv. Profit and loss to be shared equally. Additional notes related to business: The following data was available from the partnership books for the year ended 31 December 2020: * Gross Profit (spread evenly throughout the year) RM900,000 Other Operating expenses spread evenly throughout the year (excluding depreciations) RM300.000 Drawings are as following: FIZER RM30,000 (1 May 2020), ZINO RM40,000 (1 April 2020) and VIRRUS RM30,000 (1 March 2020) Additional notes related to partner: . . . On 1 July 2020, VIRRUS decided to retire from the business due to migration. Upon VIRRUS's retirement as a partner, the partnership agreement has been revised: Interest on capital to be increased to 15% per annum based on the balance of capital as at 1 July 2020 (before goodwill and revaluation); however, drawing would be maintained at the same rate. FIZER and ZINO is expected to receive a salary of RM40.000 per annum and profit or loss are to be shared on ration of FIZER (2/3) and ZINO (1/3). All amount due to VIRRUS (both capital and current account balance) will be paid by cheque. On 30 June 2020, FIZER and ZINO transferred 10% of their capital to a loan account in the business whereby interest on loan would be 5% per annum. There was no interest paid yet for the year. Goodwill was valued at RM150,000, but no goodwill account was to be opened in the firm's books Depreciation has been calculated on the non-current assets at costs as follows: Machineries 20% per annum and Equipment 10% per annum. This has been the practice from the day the business started its operation. As of 1 July 2020, non-current assets would be depreciated at the same rates but calculated on their revalued amounts. Partners agreed that the non-current assets should be revalued at 1 July 2020 as follows: Machineries RM440.000 Equipment RM115.000 Building RM 50,000 . . You are required to prepare: a. A profit & and loss and appropriation account for FIZER, ZINO and VIRRUS for the year ended 31 December 2020. (show the separation before and after retirement of partner) (15 marks) b. Revaluation A/C (5 marks) c. Capital accounts of the three partners (13 marks) d. current accounts of the three partners (12 marks) e. Extract of statement of financial position as at 31 December 2020 (Show NON-CURRENT ASSETS ONLY) (5 marks) Question 2 (50 marks) FIZER, ZINO and VIRRUS have been in partnership, VAKS VAKS ENTERPRISE, for past 3 years. Following is the statement of financial position of VAKS VAKS ENTERPRISE as at 31 December 2019: Statement of financial position as at 31 December 2019 (extract) Non-Current Assets Building 250.000 Machineries 700.000 Less: Accumulated. Depreciation (200.000) 500.000 Equipment 360.000 Less: Accumulated. Depreciation (240.000) 120.000 870.000 Capital Account: FIZER ZINO VIRRUS 300.000 300.000 200.000 800.000 Current Account: FIZER ZINO VIRRUS 70.000 60.000 50.000 180.000 Their partnership agreement is provided as below: i. Interest on capital to be allowed at 10% per annum. The partners agreed to pro-rate the interest for additional capital invested or capital withdrawn during the year ii. Interest on drawings to be charged at 20% per annum iii. All 3 partners are entitled for a salary of RM30.000 per annum each. iv. Profit and loss to be shared equally. Additional notes related to business: The following data was available from the partnership books for the year ended 31 December 2020: * Gross Profit (spread evenly throughout the year) RM900,000 Other Operating expenses spread evenly throughout the year (excluding depreciations) RM300.000 Drawings are as following: FIZER RM30,000 (1 May 2020), ZINO RM40,000 (1 April 2020) and VIRRUS RM30,000 (1 March 2020) Additional notes related to partner: . . . On 1 July 2020, VIRRUS decided to retire from the business due to migration. Upon VIRRUS's retirement as a partner, the partnership agreement has been revised: Interest on capital to be increased to 15% per annum based on the balance of capital as at 1 July 2020 (before goodwill and revaluation); however, drawing would be maintained at the same rate. FIZER and ZINO is expected to receive a salary of RM40.000 per annum and profit or loss are to be shared on ration of FIZER (2/3) and ZINO (1/3). All amount due to VIRRUS (both capital and current account balance) will be paid by cheque. On 30 June 2020, FIZER and ZINO transferred 10% of their capital to a loan account in the business whereby interest on loan would be 5% per annum. There was no interest paid yet for the year. Goodwill was valued at RM150,000, but no goodwill account was to be opened in the firm's books Depreciation has been calculated on the non-current assets at costs as follows: Machineries 20% per annum and Equipment 10% per annum. This has been the practice from the day the business started its operation. As of 1 July 2020, non-current assets would be depreciated at the same rates but calculated on their revalued amounts. Partners agreed that the non-current assets should be revalued at 1 July 2020 as follows: Machineries RM440.000 Equipment RM115.000 Building RM 50,000 . . You are required to prepare: a. A profit & and loss and appropriation account for FIZER, ZINO and VIRRUS for the year ended 31 December 2020. (show the separation before and after retirement of partner) (15 marks) b. Revaluation A/C (5 marks) c. Capital accounts of the three partners (13 marks) d. current accounts of the three partners (12 marks) e. Extract of statement of financial position as at 31 December 2020 (Show NON-CURRENT ASSETS ONLY)
