QUESTION ONE

The information given below was extracted from the accounting records of Blade Traders, a partnership business with Blake and Devin as partners, at the end of the financial year 28 February 2022:

The following must be considered:

a) The net profit for the financial year ended 28 February 2022 amounted to R700 000.

b) The partners are entitled to interest at 15% per annum on their capital balances.

c) Interest on drawings is charged at 8% per annum.

d) The partners are entitled to the following monthly salaries from 1 March 2021 to 31 December 2021:

Blade R10 000

Devin R11 000

The salaries of the partners increase by 10% with effect from 1 January 2022.

e) Blade is entitled to a bonus equal to 10% of the net profit before taking any of the above appropriations into account.

f) The balance of the profit must be shared between Ashy and Tony in the ratio 3:2 respectively.

Required:

1.1 Partner Appropriation Account. (10)

1.2 Current Account of Blade. (10)

1.3 Current Account of Devin. (10)

\begin{tabular}{|l|r|r|} \hline Extract from the ledger of Blade Traders as at 28 February 2022 \\ \hline & \begin{tabular}{c} DR \\ (R) \end{tabular} & \begin{tabular}{c} CR \\ (R) \end{tabular} \\ \hline Capital: Blade & & 500000 \\ \hline Capital: Devin & & 400000 \\ \hline Current account: Blade (1 March 2021) & 45000 & \\ \hline Current account: Devin (1 March 2021) & & 55000 \\ \hline Drawings: Blade & 250000 & \\ \hline Drawings: Devin & 310000 & \\ \hline \end{tabular}