Dave and Anna are partners in GNU Bricks, a partnership business in the manufacturing of clay paving bricks in Bergville. The partnership was established on 13 May 2021. The following information pertains to the business activities as of 29 February 2024: Balances as at 29 February 2024: R Land and buildings at cost 1 135 800 Machinery at cost 837 800 Accumulated depreciation: Machinery 315 800 Vehicles at cost 637 800 Accumulated depreciation: Vehicles 315 800 Inventory (1 March 2023) 190 700 Bank (Dr) 885 300 Trade receivables control 487 600 Trade payables control 383 000 Long-term loan (Burg Bank) 1 191 400 Capital: Dave 321 800 Capital: Anna 327 800 Drawings: Dave 85 000 Drawings: Anna 83 800 Interest on loan ? Depreciation 115 000 Delivery cost on sales 54 400 Water and electricity 91 700 Purchases 1 804 000 Security expenses 28 500 Salaries and wages 422 300 Delivery cost on purchases 24 800 Bank charges 14 900 Sales 2 782 800 Stationery consumed 24 100 Settlement discount received 36 700 Settlement discount granted 24 000 Additional information: 1 Partnership agreement: 1.1 An annual interest rate of 12% is applied to the capital account balances. 1.2 Dave and Anna agreed to share profits and losses equally. 1.3 Each partner has a monthly salary entitlement of R18,800. 2 Year-end adjustments: 2.1 The security expenses billed to the business every month include a R450 monthly fee for security at Anna’s private house. The security bill amounting to R2 150 for February 2024 has not yet been accounted for. 2.2 The long-term loan with Burg Bank secured by land and buildings, bearing a 13.5% annual interest rate, was secured on April 1, 2023, with interest payments due semi-annually at the end of September and March. 2.3 During the year, red paver bricks valued at R18 000 were taken from the inventory and used to pave the additional parking lot for customers. After the completion of the project, 20% of the bricks weren’t used and Dave took the remaining bricks to build a fireplace at his house. This adjustment is yet to be made. 2.4 The inventory's value was calculated to be R180 000 as of February 29, 2024. 2.5 Dave withdrew his salary from March to May 2024 as he had personal financial challenges. The total amount paid was debited to the salaries and wages account. Which one of the following alternatives represents the correct amount that must be disclosed as total drawings in the statement of changes in equity of GNU Bricks for the year ended 29 February 2024?

Dave and Anna are partners in GNU Bricks, a partnership business in the manufacturing of clay paving bricks in Bergville. The partnership was established on 13 May 2021. The following information pertains to the business activities as of 29 February 2024: Balances as at 29 February 2024: R Land and buildings at cost 1 135 800 Machinery at cost 837 800 Accumulated depreciation: Machinery 315 800 Vehicles at cost 637 800 Accumulated depreciation: Vehicles 315 800 Inventory (1 March 2023) 190 700 Bank (Dr) 885 300 Trade receivables control 487 600 Trade payables control 383 000 Long-term loan (Burg Bank) 1 191 400 Capital: Dave 321 800 Capital: Anna 327 800 Drawings: Dave 85 000 Drawings: Anna 83 800 Interest on loan ? Depreciation 115 000 Delivery cost on sales 54 400 Water and electricity 91 700 Purchases 1 804 000 Security expenses 28 500 Salaries and wages 422 300 Delivery cost on purchases 24 800 Bank charges 14 900 Sales 2 782 800 Stationery consumed 24 100 Settlement discount received 36 700 Settlement discount granted 24 000 Additional information: 1 Partnership agreement: 1.1 An annual interest rate of 12% is applied to the capital account balances. 1.2 Dave and Anna agreed to share profits and losses equally. 1.3 Each partner has a monthly salary entitlement of R18,800. 2 Year-end adjustments: 2.1 The security expenses billed to the business every month include a R450 monthly fee for security at Anna’s private house. The security bill amounting to R2 150 for February 2024 has not yet been accounted for. 2.2 The long-term loan with Burg Bank secured by land and buildings, bearing a 13.5% annual interest rate, was secured on April 1, 2023, with interest payments due semi-annually at the end of September and March. 2.3 During the year, red paver bricks valued at R18 000 were taken from the inventory and used to pave the additional parking lot for customers. After the completion of the project, 20% of the bricks weren’t used and Dave took the remaining bricks to build a fireplace at his house. This adjustment is yet to be made. 2.4 The inventory's value was calculated to be R180 000 as of February 29, 2024. 2.5 Dave withdrew his salary from March to May 2024 as he had personal financial challenges. The total amount paid was debited to the salaries and wages account. Which one of the following alternatives represents the correct amount that must be disclosed as total drawings in the statement of changes in equity of GNU Bricks for the year ended 29 February 2024?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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