Atieno, Babu and Chesire have been trading in partnership sharing profits/losses in the ration of 5:3:2 respectively. The following is the trial balance of the partnership as at 31 March 2021: Sh. Sh. Capital accounts - Atieno 700,000 - Babu 600,000 - Chesire 400,000 Current accounts- Atieno 350,000 - Babu 325,000 - Chesire 195,000 Drawings- Atieno 250,000 - Babu 260,000 - Chesire 250,000 Land and buildings at cost 2,000,000 Furniture and fittings at cost 500,000 Provision for depreciation of furniture and fittings 150,000 Motor vehicles 860,000 Provision for depreciation on motor vehicles 480,000 Trade debtors and creditors 365,000 823,500 Dagana account 376,500 Purchases and sales 3,380,000 5,975,000 Stock 1 April 2020 465,000 Salaries and wages 295,000 Rates 137,000 Telephone and postage 116,000 Vehicles running expenses 396,000 Insurance and subscriptions 162,000 General expenses 72,000 Bank charges and interest 124,000 Bad debts 48,000 Returns inwards and outwards 61,000 75,000 Cash in hand 24,000 Cash in bank 490,000 ________ 10,450,000 10,450,000 Required: Trading, profit and loss account for the year ended 31 March 2021. Partners current accounts. Balance sheet as at 31 March 2021.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Atieno, Babu and Chesire have been trading in
The following is the
|
|
Sh. |
Sh. |
|
Capital accounts - Atieno |
|
700,000 |
|
- Babu |
|
600,000 |
|
- Chesire |
|
400,000 |
|
Current accounts- Atieno |
|
350,000 |
|
- Babu |
|
325,000 |
|
- Chesire |
|
195,000 |
|
Drawings- Atieno |
250,000 |
|
|
- Babu |
260,000 |
|
|
- Chesire |
250,000 |
|
|
|
|
|
|
Land and buildings at cost |
2,000,000 |
|
|
Furniture and fittings at cost |
500,000 |
|
|
Provision for |
|
150,000 |
|
Motor vehicles |
860,000 |
|
|
Provision for depreciation on motor vehicles |
|
480,000 |
|
Trade debtors and creditors |
365,000 |
823,500 |
|
Dagana account |
|
376,500 |
|
Purchases and sales |
3,380,000 |
5,975,000 |
|
Stock 1 April 2020 |
465,000 |
|
|
Salaries and wages |
295,000 |
|
|
Rates |
137,000 |
|
|
|
|
|
|
Telephone and postage |
116,000 |
|
|
Vehicles running expenses |
396,000 |
|
|
Insurance and subscriptions |
162,000 |
|
|
General expenses |
72,000 |
|
|
Bank charges and interest |
124,000 |
|
|
|
48,000 |
|
|
Returns inwards and outwards |
61,000 |
75,000 |
|
Cash in hand |
24,000 |
|
|
Cash in bank |
490,000 |
________ |
|
|
10,450,000 |
10,450,000 |
Required:
- Trading,
profit and loss account for the year ended 31 March 2021. - Partners current accounts.
Balance sheet as at 31 March 2021.
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