Question 3

Danny, David and Delroy are in partnership trading as Triple D Supplies Ltd and sharing profits and losses in the ratio 3:2:1. On January 1, 2011 the partners had the following balances in their Capital Accounts and Current Accounts:

Capital Accounts

Danny	$4,000,000 Cr
David	$3,000,000 Cr
Delroy	$1,500,000 Cr

Current Accounts

Danny	$500,000 Cr
David	$300,000 Dr
Delroy	$240,000 Cr

The following additional information was presented:

During the year the partners drawings amounted to the following: Danny, $550,000; David, $750,000; and Delroy, $350,000.

The partnership agreement provides that interest on capital and drawings should be charged at 5% per annum and that the partners should receive salaries as follows: Danny, $600,000 per annum; David, $500,000 per annum and Delroy, $400,000 per annum.

On July 1, 2011 David made a personal loan of $1,000,000 to the partnership at an interest rate of 10% per annum payable half-yearly.

The partnerships net trading profit for the year ending December 31, 2011, before charging interest on loan amounted to $4,800,000.

Required:

The partners Capital Accounts.

The partners Current Accounts

The partnerships Profit and Loss Appropriation Account.

Question 3

Danny, David and Delroy are in partnership trading as Triple D Supplies Ltd and sharing profits and losses in the ratio 3:2:1. On January 1, 2011 the partners had the following balances in their Capital Accounts and Current Accounts:

Capital Accounts

Danny	$4,000,000 Cr
David	$3,000,000 Cr
Delroy	$1,500,000 Cr

Current Accounts

Danny	$500,000 Cr
David	$300,000 Dr
Delroy	$240,000 Cr

The following additional information was presented:

During the year the partners drawings amounted to the following: Danny, $550,000; David, $750,000; and Delroy, $350,000.

The partnership agreement provides that interest on capital and drawings should be charged at 5% per annum and that the partners should receive salaries as follows: Danny, $600,000 per annum; David, $500,000 per annum and Delroy, $400,000 per annum.

On July 1, 2011 David made a personal loan of $1,000,000 to the partnership at an interest rate of 10% per annum payable half-yearly.

The partnerships net trading profit for the year ending December 31, 2011, before charging interest on loan amounted to $4,800,000.

Required:

The partners Capital Accounts.

The partners Current Accounts

The partnerships Profit and Loss Appropriation Account.