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    Georgia and Harriet Are in Partnership, Sharing Profits and Losses Equally. No Interest Is Paid On

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    SCRIBDer
    1. Georgia, Harriet, and Ionna are partners in a business, sharing profits and losses. At the start of the year, Georgia had £35,000 capital and Harriet £15,000. Ionna joined with £15,000 capital. 2. At the end of the year, various accounts showed balances, including capital accounts of Georgia £10,000, Harriet £10,000, and Ionna £3,000. 3. The partners must now prepare the capital accounts, profit and loss account, profit and loss appropriation account, current accounts, and statement of financial position to finalize the accounts for the year.

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    Georgia and Harriet Are in Partnership, Sharing Profits and Losses Equally. No Interest Is Paid On

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    SCRIBDer
    29 views3 pages
    1. Georgia, Harriet, and Ionna are partners in a business, sharing profits and losses. At the start of the year, Georgia had £35,000 capital and Harriet £15,000. Ionna joined with £15,000 capital. 2. At the end of the year, various accounts showed balances, including capital accounts of Georgia £10,000, Harriet £10,000, and Ionna £3,000. 3. The partners must now prepare the capital accounts, profit and loss account, profit and loss appropriation account, current accounts, and statement of financial position to finalize the accounts for the year.

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    Original Title

    2010 06#1 Partnerships

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    1. Georgia, Harriet, and Ionna are partners in a business, sharing profits and losses. At the start of the year, Georgia had £35,000 capital and Harriet £15,000. Ionna joined with £15,000 capital. 2. At the end of the year, various accounts showed balances, including capital accounts of Georgia £10,000, Harriet £10,000, and Ionna £3,000. 3. The partners must now prepare the capital accounts, profit and loss account, profit and loss appropriation account, current accounts, and statement of financial position to finalize the accounts for the year.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    29 views3 pages

    Georgia and Harriet Are in Partnership, Sharing Profits and Losses Equally. No Interest Is Paid On

    Uploaded by

    SCRIBDer
    1. Georgia, Harriet, and Ionna are partners in a business, sharing profits and losses. At the start of the year, Georgia had £35,000 capital and Harriet £15,000. Ionna joined with £15,000 capital. 2. At the end of the year, various accounts showed balances, including capital accounts of Georgia £10,000, Harriet £10,000, and Ionna £3,000. 3. The partners must now prepare the capital accounts, profit and loss account, profit and loss appropriation account, current accounts, and statement of financial position to finalize the accounts for the year.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    1. Georgia and Harriet are in partnership, sharing profits and losses equally.

    No interest is paid on
    capital or charged on drawings. No salaries are paid to the partners.

    On 30 April 2009, the capital account balances of the partners were:

    Capital accounts: Georgia £35 000


    Harriet £15 000

    On 1 May 2010 Georgia and Harriet agreed to admit Ionna as a partner. It was agreed that:

    (i) Ionna would bring £15 000 cash into the partnership.

    (ii) Goodwill was valued at £50 000.

    (iii) Goodwill would not be retained in the books of the new partnership.

    (iv) No interest would be paid on capital.

    (v) Interest would be charged on drawings at the rate of 5% on balances at the end of the year.

    (vi) Salaries would be paid to: Harriet £9 000 and Ionna £6 000.

    (vii) Profits and losses would be shared: Georgia two fifths; Harriet two fifths; Ionna one fifth.

    36983A_Source_Booklet_GCE_Accoun2 2 16/11/2009 13:12:49


    At the end of the first year of trading, on 30 April 2010, with the exception of the capital accounts,
    the following balances remained in the books of the partnership after the preparation of the trading
    account.
    £
    63 270
    340 Cr
    4 650
    1 800
    8 500
    1 500
    9 180
    10 000
    9 800
    17 000
    6 750
    1 000
    20 000
    3 800
    52 000
    26 000
    17 690
    9 500 Dr

    430 Cr
    1 850 Dr
    1 000
    Harriet 10 000
    Ionna 3 000

    The following information is available for the year ended 30 April 2010:

    (i) Insurance includes an annual fire insurance renewal of £1 200 paid on 1 January 2010.

    (ii) Rent receivable of £500 is outstanding.

    (iii) Wages and salaries includes drawings of £5 000 made by Ionna which had been incorrectly
    posted to the wages and salaries account.

    (iv) Depreciation is charged at the rate of 25% on motor vehicles using the reducing balance
    method and 20% on office equipment using the straight line method.

    (v) The allowance for irrecoverable debts is to be maintained at 4% of trade receivables.

    36983A_Source_Booklet_GCE_Accoun3 3 16/11/2009 13:12:49


    Required:

    (a) Prepare for the year ended 30 April 2010 the:

    (i) capital accounts of Georgia, Harriet and Ionna


    (7)

    (ii) profit and loss account of the partnership


    (15)

    (iii) profit and loss appropriation account


    (6)

    (iv) current accounts of Georgia, Harriet and Ionna.


    (6)

    (b) Prepare the statement of financial position of the partnership as at 30 April 2010.
    (10)

    Ionna considered setting up business as a sole trader before agreeing to join the partnership of
    Georgia and Harriet.

    (c) Evaluate the decision of Ionna to join the partnership of Georgia and Harriet as an alternative
    to opening a new business of her own, as a sole trader.
    (8)

    (Total 52 marks)

    36983A_Source_Booklet_GCE_Accoun4 4 16/11/2009 13:12:49

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