Britney Cinton and Hillary Spears conduct business in partnership and share in profit and losses of...

 

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Britney Cinton and Hillary Spears conduct business in partnership and share in profit and losses of the partnership in a 3.2 ratio, respectively. Their bookkeeper has prepared the following Statement of Profit or Loss and other Comprehensive income in respect of the partnership's 2019 year of assessment: R R Income Gross income Bad Debts recovered (note 1) Dividends received (note 2) Interest from a South African source 487 000 3 750 4 500 6 360 19 390 521 000 Settlement Less: Expenditure Credit losses (note 1) Donations (note 4) Insurance (note 5) Delivery van purchased (note 3) Licences: Trade and delivery van Delivery van running expenses Depreciation Shop fittings at 10% (note 3) Cash register at 10% (note 3) Rental paid Staff salaries and wages Stationery and printing Drawings: Britney (note 6) Salaries paid: Britney Hillary Net profit 6 000 18 750 13 500 39 600 1 080 5 500 4 500 2 250 21 600 90 000 1 080 6 600 36 000 45 000 291 460 229 540 Net profit Britney (60%) Hillay (40%) 137 724 91 816 229 540 Notes: 1. The credit loss of R3 750 was recovered from a former debtor of Britney when he had been trading on his own, two years before. Britney sold his debtors to the partnership. R2 000 of the bad debts relates to debts that the partners took over when they purchased the business. The balance of the bad debts is wholly in respect of present customers who have failed to pay their accounts. 2. During the 2019 year of assessment, the partners decide to invest their surplus cash funds and they purchased 25 000 shares in Pablo (Pty) Ltd, a company registered in the Republic, at R3 a share. The company paid a dividend of R4 500 to the partnership on 31 December 2018. Britney Cinton and Hillary Spears conduct business in partnership and share in profit and losses of the partnership in a 3.2 ratio, respectively. Their bookkeeper has prepared the following Statement of Profit or Loss and other Comprehensive income in respect of the partnership's 2019 year of assessment: R R Income Gross income Bad Debts recovered (note 1) Dividends received (note 2) Interest from a South African source 487 000 3 750 4 500 6 360 19 390 521 000 Settlement Less: Expenditure Credit losses (note 1) Donations (note 4) Insurance (note 5) Delivery van purchased (note 3) Licences: Trade and delivery van Delivery van running expenses Depreciation Shop fittings at 10% (note 3) Cash register at 10% (note 3) Rental paid Staff salaries and wages Stationery and printing Drawings: Britney (note 6) Salaries paid: Britney Hillary Net profit 6 000 18 750 13 500 39 600 1 080 5 500 4 500 2 250 21 600 90 000 1 080 6 600 36 000 45 000 291 460 229 540 Net profit Britney (60%) Hillay (40%) 137 724 91 816 229 540 Notes: 1. The credit loss of R3 750 was recovered from a former debtor of Britney when he had been trading on his own, two years before. Britney sold his debtors to the partnership. R2 000 of the bad debts relates to debts that the partners took over when they purchased the business. The balance of the bad debts is wholly in respect of present customers who have failed to pay their accounts. 2. During the 2019 year of assessment, the partners decide to invest their surplus cash funds and they purchased 25 000 shares in Pablo (Pty) Ltd, a company registered in the Republic, at R3 a share. The company paid a dividend of R4 500 to the partnership on 31 December 2018.