The information given below was extracted from the accounting records of Preston Traders, a partnership business with Presley and Tony as partners.

The following must be taken into account:

(a) The Statement of Comprehensive Income reflected a net profit of R900 000 on 28 February 2021.

(b) The partners are entitled to interest at 12% p.a. on their capital balances.

(c) the partners are entitled to the following monthly salaries for each of the two six month periods

                1 march 2020 to 31 august 2020                    1 Sept 2020 to 28 Feb 2021

Presley                      R 16000                                                                R 17000

Tony                          R 15000                                                                R 16000

(d) Tony is entitled to a bonus equal to 5% of the net profit before any of the above appropriations have been taken into account.

(e) The remaining profit/loss must be shared between Presley and Tony in the ratio 3:2 respectively.

Transcribed Image Text:

Extract from the trial balance of Preston Traders on 28 February 2021 Debit Credit R R Capital: Presley 600 000 Capital: Tony 400 000 Current alc: Presley (01 March 2020) 40 000 Current alc: Tony (01 March 2020) 50 000 Drawings: Presley 340 000 Drawings: Tony 360 000 Extract from the trial balance of Preston Traders on 28 February 2021 Debit Credit R R Capital: Presley 600 000 Capital: Tony 400 000 Current alc: Presley (01 March 2020) 40 000 Current alc: Tony (01 March 2020) 50 000 Drawings: Presley 340 000 Drawings: Tony 360 000

Answer rating: 100% (QA)

Presley Tony Total equity 780600 409400 Explanation Here are the stepbystep guides Presto... View the full answer