Question
The following information was taken from the books of Fox & Trot: Balances in the general ledger of Fox & Trot at the financial year
The following information was taken from the books of Fox & Trot: Balances in the general ledger of Fox & Trot at the financial year end 30 June 2017.
Accounts | Debit(R) | Credit(R) |
Capital: H Fox | 60 000.00 | |
Capital: M. Trot | 55 000.00 | |
Current: H Fox (1 July 2016) | 12 000.00 | |
Current: M. Trot | 11 000.00 | |
Drawings: H Fox | 6 000.00 | |
Drawings: M. Trot | 5 500.00 | |
Net profit for the year( profit and loss) | 345 000.00 | |
Property, plant and equipment | 447 500.00 |
Appropriations according to the partnership agreement at the financial year end 30 June 2017:
1. Interest on capital must be appropriated at 13% per annum. Capital account balances remain constant.
2. Interest on drawings must be appropriated at 14% per annum, as if the drawings were made 2 months prior to the end of the financial year.
3. Interest on current accounts must be appropriated at 12% per annum (on opening balances).
4. Both partners must receive an annual salary at the end of the financial year:
* H. Fox - R 27 600.00
* M. Trot - R 24 150.00
5. M. Trot must receive an annual bonus at the end of the financial year: R41 400.00
6. The remaining profit must be split between the partners in the following ratio:
* H. Fox - 3
* M. Trot - 2
REQUIRED:
Journalise the year end adjustments and appropriations(including closing transfers) in the general journal of Fox & Trot for the year ended 30 June 2017.
NB: Narrations must be provided for all journal entries.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started