QUESTION ONE

$[45]$

Peter and Pan are partners in Captain Hook Stationers. The list of balances as at $31$ December $2022,$

before additional information was considered, is as follows:

Description

Office furniture and equipment

Amount

Accumulated depreciation on office furniture and equipment

$525000$

$65000$

Inventory

Bank

$84560$

$675895$

Debtors control

Allowance for credit losses

$65875$

$2675$

Long$-$term loan

Creditors control

$432500$

$45632$

Capital: Peter

Capital: Pan

$120000$

$150000$

Current account: Peter

Current account: Pan

$4500$

$12000$

Drawings: Peter

Drawings: Pan

$35000$

$65000$

Profit for the year

$628023$

Additional information:

$1.$

$2.$

$3.$

$4.$

$5.$

On $1$ January $2022$ Peter increased his capital to R$150000.$ The increase was charged to the

payables account in error.

Peter earns a salary of R$8000$ per month while Pan earns R$4500$ per month.

The total salaries paid to Pan was incorrectly recorded in the debtors control account. The

salaries paid to Peter was correctly accounted.

Interest of $15\%$ per year must be provided for on the capital.

Interest on current accounts must be provided at $7\mathrm{.}5\%$ per year on the opening balances.

Interest of $5\%$ is charged on the drawings.

$6.$ The partners share profits and losses in the ratio of capital contributed at the start of the

financial year.

$7.$ Office furniture and equipment depreciates at $10\%$ per year on the straight$-$line method.

Depreciation was not yet considered.

Required:

$1\mathrm{.}1$ Prepare the current account of Peter as at $31$ December $2022[15]$

$1\mathrm{.}2$ Prepare the statement of changes in equity as at $31$ December $2022[30]$