QUESTION 4 PARTNERSHIP (20 Marks) The information below was extracted from the accounting records of BUFFLO BAKERY, a partnership business with partners BUFF and FLO for the year ended 28 February 2017 REQUIRED 4.1 Prepare the Appropriation Account in the General Ledger. (14 marks) 4.2 Prepare the PARTNERSHIP EQUITY SECTION of the Statement of Financial Position as at 28 February 2017 (6 marks) INFORMATION Debit Credit 300 000 200 000 Balances on 28 February 2017 Capital : Buff Capital: Flo Current Account : Buff [ 01 March 2016) Current Account: Flo (01 March 2016) Drawings : Buff Drawings : Flo 20 000 10 000 210 000 190 000 The following must be taken into account: 1. The Profit and Loss Account reflected a net profit of R500 000. 2. Each partner is entitled to interest on capital at 15% p.a. NB: Both partners had increased their capitals by R100 000 on 01 September 2016. The capital changes have been properly recorded. 3. Partners are entitled to the following monthly salaries : From 01 March 2016 to 31 July 2016, their salaries are Buff, R12 000 per month. Flo, R13 000 per month From 01 August 2016 to the end of the financial year the partners' monthly salaries were increased by 10%. SO S 4. Buff is entitled for a special bonus equal to his monthly salary for February 2017. Izowot 1200 20 5. Partners Buff and Flo share their profits or losses in the agreed ratio of 3:2 respectively