QUESTION ONE $[45]$

Peter and Pan are partners in Captain Hook Stationers. The following list of accounts show

balances as at $31$ December $2022,$ except for those accounts that have been stated

differently.

Description of general ledger accounts: Amount $-$ R

Office furniture and equipment at cost $525000$

Accumulated depreciation on office furniture and equipment $65000$

Inventory $84560$

Bank $579895$

Accounts receivables control $65875$

Allowance for credit losses $2675$

$7,5\%$ Long$-$term loan from Ruby Finance House $432500$

Accounts payable control $45633$

Capital: Peter $-($Balance as at $1$ January $2022)120000$

Capital: Pan $150000$

Current account: Peter $-($Debit balance as at $1$ January $2022)4500$

Current account: Pan $($Credit balance as at $1$ January $2022)12000$

Drawings: General $-$ Peter $35000$

Drawings: Salaries $-$ Peter $96000$

Drawings: General $-$ Pan $65000$

Profit for the year $628022$

$2$

Additional information:

Year end adjustments:

$1.$ On $1$ January $2022$ Peter deposited sufficient money to increase his capital to

R$150000.$ The increase was correctly debited but incorrectly credited to the Accounts

payable control account.

$2.$ Pan was paid a salary of R$4500$ per month for the current financial year. All Pan$$s

monthly salary payments were incorrectly recorded to the debit of the Accounts

Receivables control account. Peter$$s salary payments of R$8000$ per month were

recorded correctly.

$3.$ Depreciation at the rate of $10\%$ per year on the straight line method on office furniture

and equipment needs to be recorded.

Relevant information from the Partnership Agreement:

Interest must be calculated and recorded at the following rates at the end of each financial

period.

Interest is processed through the Partner$$s current account. Interest needs to be taken into

account as follows; $($Show all workings. Round of all calculations to the nearest Rand$)$:

$1.$ Interest on the Partners$$ capital accounts must be calculated at $15\%$ per year;

$2.$ Interest on Current accounts must be provided at $7\mathrm{.}5\%$ per year on the opening

balances.

$3.$ Interest of $5\%$ is charged on the closing balances of the Drawings; General accounts.

$4.$ In terms of the partnership agreement Peter is entitled to a salary of R$8000$ per month

and Pan is entitled to a salary of R$4500$ per month to be appropriated from profits.

$5.$ The partners share profits and losses in the ratio of capitals contributed at the end of

business on the first day of the financial year.

Required:

Prepare the following for Captain Hook Stationers for the financial year ended $31$ December

$2022.$

$3$

$1\mathrm{.}1$ Current Account : Peter $-$ balanced at $31$ December $2022[15]$

$1\mathrm{.}2$ Statement of changes in equity for the year ended $31$ December $2022.$ Use a format

suitable to this type of business that clearly shows the appropriation in terms of the

clauses extracted from the partnership agreement as listed above.