Wayne and Tammi are partners in The Ivy Arrow. The firm has supplied the following details as
Question:
Wayne and Tammi are partners in The Ivy Arrow. The firm has supplied the following details as of December 31, 2017
DETAILS | DR | CR |
Sales | 570,000 | |
Wages and Salaries | 68,000 | |
Discount Allowed | 6,200 | |
Loan Interest | 15,000 | |
Creditors | 61,315 | |
Return Outwards | 8,500 | |
Rent Received | 14,000 | |
Purchases | 310,200 | |
Debtors | 54,350 | |
Provision for Bad Debts | 3,200 | |
Telephone Charges | 12,000 | |
Bank | 79,300 | |
Cash | 18,200 | |
Land and Building | 220,000 | |
Provision for Depreciation on Building | 45,000 | |
Motor Vehicle | 290,000 | |
Provision for Depreciation on Motor Vehicle | 24,000 | |
Machinery and Equipment | 132,000 | |
Provision for Depreciation on Machinery & Equipment | 13,200 | |
Capital Wayne | 100,000 | |
Capital Tammi | 150,000 | |
Current Account Wayne | 30,000 | |
Current Accounts Tammi | 60,000 | |
Drawings Wayne | 20,000 | |
Drawings Tammi | 80000 | |
10% Loan | 270,000 | |
Building Repairs | 39,815 | |
Commission Received | 50,000 | |
Opening Stock | 34,600 | |
Insurance | 21,500 | |
Office Supplies | 36,650 | |
1,418,515 | 1,418,515 |
Additional information at the end of the year
- Stock at the end of the year was valued at $64,000
- Insurance is owing by $1500
- Wages and salaries are owing by $2,000
- Telephone charges are owing by $1,000
- The commission is prepaid by $3,000
- The provision for bad debts is to be adjusted to 10% of the debtors
- Depreciation is to be charged as follows
Land and building | 10% | Reducing Balance |
Motor Vehicle | 10% | Straight Line |
Equipment | 10% | Reducing Balance |
Details of the partnership agreement included the following
- Interest on drawings is to be calculated at 10%
- Interest on capital is to be paid at 10%
- Wayne is to be paid a salary of $20,000
- The partners are to share profits in the same ratio as their capital
Required: Prepare the following for the year 2020 :
- The Statement of Profit and Loss and Appropriation Account
- The Partners Current Account
- The Statement of Financial Position
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer