Question 2

Prepare the Statement of Changes in Equity for the year ended 28 February 2022.

INFORMATION

The information given below was extracted from the accounting records of Sunray Traders, a partnership business with Sunny and Raymond as partners.

Extract from the ledger of Sunray Traders as at 28 February 2022
	Debit	Credit
	R	R
Capital: Sunny		1 000 000
Capital: Raymond		600 000
Current a/c: Sunny (01 March 2021)	60 000
Current a/c: Raymond (01 March 2021)		40 000
Drawings: Sunny	300 000
Drawings: Raymond	400 000

The following must be taken into account:

(a) The Statement of Comprehensive Income reflected a net profit of R900 000 for the year ended 28 February 2022.

(b) The partnership agreement provided for interest on capital at 12% p.a. on the balances on the capital accounts. Note: Sunny increased his capital contribution by R200 000 on 01 June 2021 whilst Raymond decreased his capital contribution by R200 000 on 01 September 2021. The capital changes have been recorded.

(c) The partners are entitled to the following monthly salaries from 01 March 2021 to 30 November 2021: Sunny R25 000

Raymond R20 000

Note: The salaries of the partners were increased by 10% with effect from 01 December 2021.

(d) The balance of the profit/loss must be shared equally between Sunny and Raymond.