The partnership of Alistair, Brian and Clyde does not keep separate capital and current accounts for the
Question:
The partnership of Alistair, Brian and Clyde does not keep separate capital and current accounts for the partners. The partnership agreement provided for:
1. Annual salaries to be paid to: Alistair R12 000, Brian R10 000 and Clyde R8 000.
2. Interest to be allowed or charged on opening capital account balances at 18% per annum.
3. Profits and losses to be shared in this ratio:
This information is for the financial year ended 28 February 20x6: (Ignore VAT.)
• Profit for the year before allowing/charging interest on capital accounts but after allowing for partners’ salaries amounted to R15 360.
• The salaries have not yet been withdrawn by the partners.
You are required to:
Prepare the partners’ capital accounts in the general ledger for the year ended 28 February 20x6.
Step by Step Answer:
Fundamental Accounting
ISBN: 9781485112112
7th Edition
Authors: David Flynn, Carolina Koornhof, Ronald Arendse, Anna C. E. Coetzee, Edwardo Muriro, Louise Christel Posthumus, Louise Mancy Smit