QUESTION 1 PARTNERSHIP (20 Marks) Use the information extracted from the accounting records of LS TRADING, a partnership owned by partners, LONG and SHORT, and prepare the Statement of Changes in Equity for the year ended 28 February 2017. NB: copy the format given below in your answer book. INFORMATION: 1. Extracts from the Trial Balance on 28 February 2017. Accounts Debit Credit Capital : Long 300 000 Capital : Short 300 000 Current Account : Long 3 000 Current Account : Short 11 000 Drawings : Long 225 000 Drawings : Short 255 000 2. The net profit on 28 February 2017 amounted to R500 000. 3. The partnership agreement made provision for the following: Partners are entitled to the following monthly salaries : Long, R9 500 Short, R11 000 Interest on each partners capital must be provided at 12% p.a. NB: Partners had made the following changes to their capitals during the year and were properly recorded: Long decreased his capital by R60 000 on 01 June 2016. Short increased his capital by R60 000 on 01 September 2016. Short is entitled to a special bonus of 10% of the net profit for the year. Partners are to share any remaining profits / losses equally. 2 && LS TRADING Statement of Changes in Equity for the year ended 28 February 2017. CAPITAL ACCOUNTS Long Short Total Balance on 01 March 2016 Changes in capital Balance on 28 February 2017 CURRENT ACCOUNTS Long Short Total Balances on 01 March 2016 Net profit for the year Interest on capital Salaries Bonus Interest on drawing Share of remaining profit / loss Drawings Balances on 28 February 2017