Long and Short are in partnership, sharing profits and losses in the ratio 3 : 2. Their abridged statement of financial position as at 30 September 20x4 was: (Ignore VAT.)

They did not keep proper accounting records, but you discovered that:

1. R6 800 had been paid on the loan. This amount included interest at a rate of 12% per annum.

2. Accounts payable at 31 March 20x5 totalled R16 000, inventory R140 000, and accounts receivable R20 000.

3. R2 000 had been spent on furniture during the six months and it is desired to write off R500 for depreciation.

4. Land and buildings have had no additions and are not depreciated.

5. The bank statement showed an overdraft of R1 000, but there were outstanding cheques totalling R600, and outstanding deposits of R900.

6. An allowance for bad debts of R1 500 is considered adequate at 31 March 20x5.

7. Long had drawn R10 000 and Short R8 000 during the six months.

8. They are entitled to interest at the rate of 10% per annum on capital.

You are required to:

Prepare a statement of financial position, in T-form, for Long and Short at 31 March 20x5.

Transcribed Image Text:

ASSETS Land and buildings at cost Furniture at carrying value Inventory Accounts receivable Less: Allowance for bad debts Bank EQUITY & LIABILITIES 60 000 00 Capital: Long 10 000 00 Short 118 000 00 24 000 00 Loan secured by a mortgage over land and buildings (2 000 00) Accounts payable 2 000 00 212 000 00 100 000 00 60 000 00 40 000 00 12 000 00 212 000 00