QUESTION 3 (20)

The information given below was extracted from the accounting records of Casper Limited, a partnership business with Bruce and Lee as partners.

INFORMATION

Extract from the ledger of Casper Limited on 30 June 2020:

Capital: Bruce 400 000

Capital: Lee 300 000

Current a/c: Bruce (01 July 2019) 45 000 CR

Current a/c: Lee (01 July 2019) 42 000 DR

Drawings: Bruce 95 000

Drawings: Lee 110 000

The following must be taken into account:

1. On 30 June 2020 the Profit and Loss account reflected a net profit of R940 000.

2. Partners are entitled to interest at 14% p.a. on their capital balances.

Note: Bruce decreased his capital contribution by R90 000 on 01 July 2019. This capital decrease has been recorded.

3.Partners are entitled to the following monthly salaries:

Bruce R13 000 for the first ten months of the financial year and R15 000 for the next two months.

Lee R10 000 per month throughout the year.

4. Partner Lee is entitled to a bonus equal to 10% of the net profit before any of the above appropriations have been taken into account.

5.The remaining profit/shortfall must be shared equally between Bruce and Lee.

REQUIRED

Prepare the Statement of Changes in Equity for the year ended 30 June 2020.