QUESTION THREE [20] Pitao and Steve are partners operating a business Topclass Pro Services. The information that follows is relevant to the business activities of the partnership for the year ended 30 June 2020. Pitao and Steve share in profits and losses in the ratio of 3.2 respectively Topclass Pro Services Extract of relevant account balances as at 30 June 2020 Credit R 270 000 270 000 52 900 Debit R Capital Pitso Capital: Steve Current account Pitso balance at 1 July 2019 76 600 Current account Steve balance at 1 July 2019 Drawings for the year. Piso 68 310 Drawings for the year: Steve 43 470 Long term loan from Piso Salones paid to partners during the year, Pitso 144 000 Steve 126 000 Profit for the your-before taking the any of the additional Information into account Additional information The following has been extracted from the partnership agreement: 110 000 765 500 1. Interest must be calculated and recorded at the following rates at the end of each financial period. All interest must be processed through the current accounts of the partners Interest rates are as follows: 1. Introut on capital must be calculated at 10% per year, 12 inwrot at 10% per yow on current count balances at beginning of the year, 1.3 ronton drawings account balances has been calculated as fooww RAMO Steve R2 000 . 2. The following are we payable to the partners for the current you PR12 000 per month 15 000 per month Year-end adjustments: 1. On 1 January 2020 Pitso contributed another R90 000 as capital to the partnership. It was agreed that the amount will be included in his foed capital account. The transaction was correctly recorded as at 30 June 2020. 2. Pitso granted an unsecured loan to the partnership on 1 January 2020. According to the loan agreement interest will be charged at 10% per year. The loan will be repaid in annual instaliments s beginning 31 December 2024. Interest on the loan is still to be calculated and recorded in the books of the partnership Required: Take the above information into account and adjust the "Profit for the year to show the correct amount to be shared between the partners, Piso and Steve. Thereafter. prepare the statement of changes in equity for Topclass Pro Services for the year ended 30 June 2020 to clearly show the distribution of profits in terms of the partnership agreement. Show all calculations. Use the format suggested below. (20) Recommended format: Topclass Pro Services Statement of changes in equity for the year ended 30 June 2020 Cancun Pitso Steve Balance at 1 July 2019 Additional contributions Balance at 30 June 2020 R R Total R Current accounts: Pitso R Steve R Appropriation R Balance 1 July 2013 Profit for the year Appropriations Interest on capital Interest on current al Interest on drawings Salaries due Share of profits Drawings Balance 30 June 2020 QUESTION THREE [20] Pitao and Steve are partners operating a business Topclass Pro Services. The information that follows is relevant to the business activities of the partnership for the year ended 30 June 2020. Pitao and Steve share in profits and losses in the ratio of 3.2 respectively Topclass Pro Services Extract of relevant account balances as at 30 June 2020 Credit R 270 000 270 000 52 900 Debit R Capital Pitso Capital: Steve Current account Pitso balance at 1 July 2019 76 600 Current account Steve balance at 1 July 2019 Drawings for the year. Piso 68 310 Drawings for the year: Steve 43 470 Long term loan from Piso Salones paid to partners during the year, Pitso 144 000 Steve 126 000 Profit for the your-before taking the any of the additional Information into account Additional information The following has been extracted from the partnership agreement: 110 000 765 500 1. Interest must be calculated and recorded at the following rates at the end of each financial period. All interest must be processed through the current accounts of the partners Interest rates are as follows: 1. Introut on capital must be calculated at 10% per year, 12 inwrot at 10% per yow on current count balances at beginning of the year, 1.3 ronton drawings account balances has been calculated as fooww RAMO Steve R2 000 . 2. The following are we payable to the partners for the current you PR12 000 per month 15 000 per month Year-end adjustments: 1. On 1 January 2020 Pitso contributed another R90 000 as capital to the partnership. It was agreed that the amount will be included in his foed capital account. The transaction was correctly recorded as at 30 June 2020. 2. Pitso granted an unsecured loan to the partnership on 1 January 2020. According to the loan agreement interest will be charged at 10% per year. The loan will be repaid in annual instaliments s beginning 31 December 2024. Interest on the loan is still to be calculated and recorded in the books of the partnership Required: Take the above information into account and adjust the "Profit for the year to show the correct amount to be shared between the partners, Piso and Steve. Thereafter. prepare the statement of changes in equity for Topclass Pro Services for the year ended 30 June 2020 to clearly show the distribution of profits in terms of the partnership agreement. Show all calculations. Use the format suggested below. (20) Recommended format: Topclass Pro Services Statement of changes in equity for the year ended 30 June 2020 Cancun Pitso Steve Balance at 1 July 2019 Additional contributions Balance at 30 June 2020 R R Total R Current accounts: Pitso R Steve R Appropriation R Balance 1 July 2013 Profit for the year Appropriations Interest on capital Interest on current al Interest on drawings Salaries due Share of profits Drawings Balance 30 June 2020
