statement of changes in Equity

QUESTION 2 (5 MARKS) Following the success of his business in the first year of operations, P. Prince decided to expand his business by inviting his cousin, T. Tony, to join him as partner. The partnership commenced on 01 March 2018 trading as Princeton Traders, with the partners contributing R500 000 each as capital. The information given below was extracted from the accounting records of Princeton Traders for the financial year ended 28 February 2019. REQUIRED Complete the following extract of the Statement of Changes in Equity for the year ended 28 February 2019: EXTRACT OF STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28 FEBRUARY 2019 Prince Tony Total Current Accounts Net profit for the year Interest on capital Salaries Bonus Profit Share INFORMATION Extract from the trial balance of Princeton Traders on 28 February 2019 Debit (R) Credit (R) Capital: Prince 600 000 Capital: Tony 500 000 The following must be taken into account: (a) On 28 February 2019 the Statement of Comprehensive Income reflected a net profit of R900 000 The partners are entitled to interest at 12% p.a. on their capital balances. (b) Note: On 01 December 2018 Prince increased his capital contribution by R100 000. This transaction has been recorded. (c) The partners are entitled to the following monthly salaries for each of the two half- year periods: T01 March 2018 to 31 August 2018 01 September 2018 to 28 February 2019 R9 000 R9 500 Tony R8 500 R9 000 Tony is entitled to a bonus equal to 5% of the net profit before any of the above appropriations have been taken into account. (e) The remaining profitloss must be shared equally between Prince and Tony. TOTAL: 20 Format Text: Arial or Times New Roman (12); Spacing 1% lines. All text must be justified at each margin. Use the formats provided for both questions. Start each question on a new page. You may make use of a spreadsheet (e.g. Microsoft Excel) to assist you only with the construction of tables and formats. Solutions generated by software packages will not be marked