QUESTION THREE [20 Marks]

Kane and Abel are in partnership sharing profits and losses in the ratio of 1:1. The following relates to their business Two Wheels whereby they sell motor bikes. Their dealership is popular with many motor-bike enthusiasts. The list of balances at 28 February 2022 before relevant additional information was taken into account is as follows:

Capital: Kane	400 000
Capital; Abel	600 000
Current account Kane (1 March 2021) - Debit	44 000
Current account Abel (1 March 2021) - Credit	130 000
Drawings Kane	90 900
Drawings Abel	87 960

Profit and loss account profit for the year

1 084 800

Additional information:

On 1 September 2021, Abel contributed a further R100 000 as capital into the partnership. The transaction has been recorded correctly.

The partnership agreement stipulates the following:

Partners are entitled to salaries as follows: Kane is entitled to R18 000 per month. From 1 December 2020 his salary must be increased to R20 000 per month, Abel is entitled to a salary of R14 000 per month.

Interest on capital must be provided at 12 % per year.

Interest on current accounts must be provided at 5% per year on current account balances at the beginning of the year (1 March).

Kane is entitled to a bonus equal to 10% of the profit for the year before any appropriation is made in terms of the partnership agreement.

Kane and Abel share profits and losses equally.

During the year R144 000 and R96 000 were paid as salaries to Kane and Abel respectively. These amounts were credited to the bank account but incorrectly debited to the debtors control account. Correction is required.

Required: Prepare a statement of changes in equity for the year ended 28 February 2022 for Two Wheels that is appropriate to the business of the partnership. You may omit the total column in the Current account section. Show all workings.

Use the following format: (include identifying features):

Capital accounts	Kane - R	Abel - R	Total - R
Balance at
Changes in contribution
Balance at

Current Accounts:	Kane - R	Abel - R	Total - R
Balance at
Profit for the year
Appropriations:
Salaries
Interest on capital
Interest on current a/c
Bonus
Remaining profit
Share of profits
Drawings
Balance at

This is a 20 marks question can u please assist..