Prin Of Accnts 2 2007 138x216.

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SECTION I
Answer ALL questions in this section.

1. (a) List THREE distinguishing features of a partnership concern. (3marks)

(b) Skerritt and Cymbal are in Partnership sharing profits and losses in the ratio of their capital
balances. The following balances were left over in their books after the preparation of the
Trading and Profit and Loss Account on September 30, 2006.
$
Capital Accounts: Skerritt 30000
Cymbal 40000
Current Accounts Skerritt (300)
Cymbal 1 500
Drawings Skerritt 12 000
Cymbal 5000
Motor Vehicles at cost 43 000
Buildings at cost 232 000
Debtors 23 300
Creditors 17 000
Stock at September 30, 2006 18 000
Cash at bank 27000

Additional information to be taken into consideration:

(1) The net profit for the year ended September 30, 2006 is $250 000.
(2) Each partner earns an annual salary of $60 000.
(3) Interest on capital is to be paid at the rate of 5% per annum.
(4) Interest on drawings is to be charged at the rate of 10% per annum. Skerritt drew
cash on October 31, 2005 and Cymbal drew cash on March 31,2006.
(5) Accumulated depreciation on Motor Vehicles to September 30, 2006 is $8 600.

Required:

(i) Prepare the Profit and Loss Appropriation Account of Skerritt and Cymbal for the
year ended September 30, 2006. ( 6 marks)

(ii) Prepare the Current Accounts of Skerritt and Cymbal on September 30, 2006.
(5 marks)

(iii) Prepare the Balance Sheet of Skerritt and Cymbal as at September 30, 2006,
showing the working capital. (Do not show details of the current accounts in the
Balance Sheet. Transfer only the closing balances from the partners' current
accounts.) ( 6 marks)

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01239020/F 2007
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SECTION I

Answer the THREE questions in this section.

1. The following information has been extracted from the books of Allert and Wildman who have
been in partnership as manufacturers for several years.

Partners ' Capital Account at January 1, 2008:

$
Allert 120 000
Wildman 80 000

Partners' Current Account at January 1, 2008:

$
Allert 5 000
Wildman (300)

Partners' Drawings for the year ended December 31 , 2008:

$
Allert 7 000
Wildman 4 800

Net profit for the year ended December 31 , 2008: $72 500

The partnership agreement between Alle rt and Wildman provides for the following:

1. Partners are to receive interest at the rate of 10 % per annum on their opening
capital account balances.

2. Interest at a rate of 5 % per annum is to be paid on partners' drawings during the

year.

3. Wildman is to receive a partnership salary of $ 1 000 per month.

4. The balance of the net profit or loss is to be shared between partners in propor-
tion to their capital accounts' balances.

Required:

(a) Prepare the partnership Profit and Loss Appropriation Account for the year ended
December 3 1, 2008. ( 8 marks)

(b) Prepare the Current Accounts for the partnership as at December 31 , 2008.
( 10 marks)

(c) State ONE disadvantage of being a general partner in a partnership . ( 1 mark )

(d) Calculate the amount of the net profit due to EACH partner based on the principles of
the Partnership Act of 1890. ( 1 mark )

Total 20 marks

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01 239020/JANUARY/F 2009
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3. Jack and Genny have been in partnership for several years producing and selling a variety of
items. The following balances were extracted from the books of the partnership for the year ended
31 December 2013.

Jack Genny
$ $
Capital Accounts 80 000 70 000
Current Accounts (500) 2 100
Drawings 6 000 4 000

Net profit for the year is $39 350.

Information from the partnership agreement included:

– Profits and losses are to be shared 3:2 to Jack and Genny respectively.

– Genny is to receive a salary of $12 000 per annum.

– Interest on capital is to be paid at a rate of 5% per annum.

– Interest on drawings is to be charged at a rate of 10% per annum.

• Jack withdrew cash (drawings of $6 000) on 1 April 2013.

• Genny withdrew cash (drawings of $4 000) on 1 July 2013.

(a) Prepare the Profit and Loss Appropriation Account of Jack and Genny for the year ended
31 December 2013. (10 marks)

(b) Prepare the partners’ Current Accounts on 31 December 2013. (8 marks)

(c) What is Jack’s net worth at 31 December 2013? (2 marks)

Total 20 marks

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01239020/JANUARY/F 2014
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SECTION I

Answer the THREE questions in this section.

1. Swigger and Thirst entered into a business partnership on 01 January 2013. The total amount
of capital contributed through the partnership was $60 000. Swigger contributed $40 000 of the
total capital and Thirst contributed the balance. It is now six months since the partnership was
formed.

Swigger and Thirst agreed to share profits in the ratio of 2:1 respectively. Partners’ drawings for
the six months ended 30 June 2013 were:

Partner Amount ($)

Swigger 8 000

Thirst 600

The following information is available for the first six months ended 30 June 2013:

Profits calculated for the six months $15 380

Other revenues earned, but which were not yet included in profits $620

Interest on capital 10% per annum

Interest on drawings 5% per annum

Annual salary for Thirst $18 000

(a) How much of the capital did Thirst contribute? (1 mark)

(b) Prepare the Appropriation Account of the partnership for the SIX months ended 30 June
2013. (12 marks)

(c) Prepare columnar Current Accounts of the partners for the SIX months ended 30 June
2013. (7 marks)

Total 20 marks

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SECTION II

Answer the TWO questions in this section.

Write your answers in the spaces provided in this booklet.

4. HOUSE AND HOME, PARTNERS

House and Home, who have been in the business of shipping goods to and from islands in the
Caribbean for several years, provided you with the following information.

31 December 2016

Ships 180 000

Loading equipment 93 000

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Accounts receivable 42 000

Cash 18 000

Accounts payable 61 000

6 month investment in government loan scheme 12 000

5% three-year loan from Warren Bank 90 000

Bank overdraft 8 000

Prepaid insurance 15 000

Additional information:

– House has contributed twice as much capital as Home.

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(a) Using the vertical style draw up a classified Statement of Financial Position (Balance
Sheet) for House and Home Partners as at 31 December 2016.
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(12 marks)
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House and Home have decided on the following arrangements in sharing profits and losses:

– Interest on drawings should be charged at 8% per annum.

– Each partner is to receive $10 000 each year as investment income.
– Home is to receive an annual salary of $18 000.
– Remaining profits or losses will be shared in the ratio of their capital contribution.

The following additional information is available:

– After appropriation, profits totalled $24 000 during the year ended 31 December 2016.
– Current account balances as at 01 January 2016 were House $34 000; Home $60 000.
– Drawings taken for the year were as follows: House $20 000; Home $10 000.

(b) Using the forms provided on pages 19 and 20, prepare the partners’ Current Accounts
to show the changes in their balances over the year.

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Current Account: House

Date Details $ Date Details $

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 Current Account: Home
Date Details $ Date Details $

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(8 marks)

Total 20 marks

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