Raiee and Kyle are trading in partnership as Wedding Planners. Their partnership agreement allows for a rate 5% to be allowed on capital and 5% also on the opening balances on the current accounts. Kyle is to earn a salary of Rf18,000 annually. Profits and losses are to be shared in the proportion, Kyle 60% and Raiee 40%.

Raiee and Kyle

Trial Balance as at 30 June 2021

	Debit	Credit
	Rf	Rf
Capital account – Raiee		50,000
Capital account – Kyle		75,000
Current account – Raiee		4,000
Current account – Kyle		5,000
Drawings – Kyle	17,000
Drawings – Raiee	20,000
Revenue		541,750
Purchases of booklets for distribution to students	291,830
Returns inwards and outwards	800	330
Carriage inwards	3,150
Staff salaries	141,150
Rent	2,500
General Insurance	1,000
Public Indemnity Insurance	1,500
Compensation paid due to error by Kyle	10,000
General expenses	9,500
Bad debts written-off	1,150
Fixtures and fittings at cost	74,000
Fixtures and fittings depreciation		12,000
Accounts receivable and accounts payable	137,500	23,400
Cash	400
Totals	711,480	711,480

Further information:

• An allowance for doubtful debts of Rf1,500 is to be created.
• On 30 June 2020, Rf50 of general insurance and Rf100 of public indemnity insurance were paid in advance.
• The depreciation for Fixtures and Fittings is calculated at 10% on cost.
• The interest on drawings is fixed at Rf550 for Raiee and Rf1050 for Kyle.
• The closing inventory for the partnership was counted and worth Rf1500 on 30 June 2021.

Required:

Prepare an income statement including an appropriation account, current account and a statement of Financial Position as at 30 June 2021.

Answer rating: 100% (QA)

Trading and Profit and Loss alc for the year ended Particulous To Stock opening To ... View the full answer