Professional Documents
Culture Documents
Date
Total marks 80
HIGHEST MARK IN CLASS
TIME ALLOWED 2 hours and 30 minutes
Starting time
Ending time
Percentage
Grade
TEACHERS COMMENTS:
Net profit for 1996 was £60000 before interest. Drawings at the end of 1996 totalled:
Bramley £24000
Pippin £22000
Cox £20000
No current accounts were maintained, and no goodwill account was opened. Assume that all
drawings were made on first day of the year.
Required:
Show the partners capital accounts for the year ended 31 December 1996. (20 marks)
Notes:
i. A CREDIT of £20000 in 1 April 1997. This represented capital introduced by a new
partner, Keaton to buy a one fifth share of the business from that date. No goodwill
account was opened in the partnership books. Profits Stan, Hardy and Keaton is to
be shared in the ratio 2:2:1 respectively.
ii. A CREDIT of £3370 on 1 November 1997, being the sale proceeds of vehicle with a
book value of £4500 at that date of sale.
Additional information:
• No entries had been made relating to interest charged at 4% per annum on partners
drawings.
• Stan and Hardy’s drawings were made in four equal instalments on 1 July 1997, 1 October
1997, 1 January 1998, and 31 March 1998.
• Keaton’s drawings were made in two equal instalments on 1 January 1998 and 31 March
1998.
Required:
a. Prepare a profit/loss appropriation account. (5)
b. Show the partners capital accounts. (8)
c. Prepare a balance sheet as at 31 March 1998. (7)
£ £
Fixed assets (net book value)
Buildings 104000
Fixtures and fittings 35000
Motor vehicles 26000
165000
Current assets
Stock 10500
Debtors 17230
Bank 950
28680
Current liabilities
Creditors (9230)
19450
184450
Capital accounts: Saima 80000
Hammad 40000
120000
Current accounts: Saima 14430
Hammad (2580)
11850
Loan from Saima 52600
184450
The partnership ceased trading on 30 September 2003 and the assets realised were as
follows:
Buildings £100000
Fixtures and fittings £37000
Motor vehicles £15000
Stocks £5200
Additional information:
• The remaining motor vehicle was taken over by Saima at an agreed valuation of
£9500.
• All debts collected and banked except for bad debts £900 and discount allowed
amounted to £200.
• Creditors were paid in full.
• Dissolution expenses amounted to £1200 which was paid by cheque.
• Saima’s loan was repaid from the bank account.
Required:
a. Realisation account.
b. Partners capital account
c. Bank account.
Notes:
1. Sales invoices totalling £5400 had been omitted from the sales day book
totals.
2. In voice for sale of goods on credit for $4500 was not entered in the books.
3. £80 discount allowed had been over added in the cash book.
4. The bad debts written off included a transfer to profit and loss account of
£500 which represented an increase in general provision for doubtful debts
in the year.
5. A credit balance of £46 had been listed incorrectly as £64.
6. The debit balance of Ted Brown (£340) had been listed as Ted Bragg.
7. The purchase day book was under cast by £200.
8. Invoices for credit sales of £4000 had not been entered into the accounts.
John just came to know that one of the invoices was for a business which
had gone bankrupt and there was no chance of payment.
9. Discount allowed of £28 had been correctly entered in the cash book and
the discount allowed account but was not entered in the debtors account in
the ledger.
Required:
a. Prepare an amended sales ledger control account. (20)