Assignment Cover Page (Autosaved)- WordERTDESIGNPAGE LAYOUTREFERENCESMAILINGSREVIEWVIEWFOXIT READER PDFB RulesMatch Fieldsil- Recipients Recipient List Merge Fields BlockO Find RecipientR Check for ErrorsSelectEditHighlight Address Greeting Insert MergePreviewFinish &LineField -e Update LabelsResultsMerge -Start Mail MergeWrite & Insert FieldsPreview ResultsFinishQUESTION THREE [20]Adax Designs Services is a partnership with Adam and Max as partners. Thepartnership has been operating successfully for a number of years now. The partnershave a written partnership agreement. The following information was extracted from theaccounting records of Adax. Design Services for the financial year ended 28 February2021:Balances in the ledger as at 28 February 2021Land and buildings at costAccumulated depreciation: buildingsEquipment at carrying amountDebtors835 000(65 000)270 000103 000Capital- AndileCapital- SiphoCurrent account- Andile Credit balance (1 March 2020)Current account -Sipho Debit balance (1 March 2020Drawings - Andile: GeneralDrawings - Sipho: GeneralNet profit for the year ended 28 February 2021The following must still be taken into account:1. The partnership agreement makes provision for the following:• Interest on capital must be provided at 12% per year on the balances in the400 000300 00040 00020 000130 000102 000800 000to searchDesktop22°C 6 RulesEditHighlight Address Greeting Insert MergeMatch FiekdsFind RecipientPreviewats - Recipient List Merge Fields Blockl MergeLineField -là Update LabelsCheck for ErrorsFinish &ResultsMergeWrite & Insert FieldsPreview ResultsFinish1. The partnership agreement makes provision for the following:• Interest on capital must be provided at 12% per year on the balances in thecapital accounts for the period 1 March 2020 to 31 August 2020. The interest rateincreases to 15% per year for the remainder of the year ie 1 September 2020 to28 February 2021. The capital accounts remained unchanged.• Interest on current accounts must be provided at 12% per year on the openingbalances of the current accounts.• The partners are entitled to the following monthly salaries:Andile R18 000 per month for a full year.Sipho R20 000 per year for the fullyear.Andile and Sipho withdrew 50% of their monthly salaries in cash as drawings.These amounts are not included in the drawings account shown above.Sipho is entitled to a special bonus equal to 2,5% of the net profit for the year.Andile and Sipho share profits and losses in the ratio of 3:2 respectively.Required:Use the information provided above to prepare the statement of changes in equity(current accounts only) for the year ended 28 February 2021.Use the following format: Capital accounts section is NOT required.1nquity for the vear ended 28 February 2021

A partnership appears to be a group of people who have opted to distribute the profits from a…

QUESTION THREE [20] Adax Designs Services is a partnership with Adam and Max as partners. The partnership has been operating successfully for a number of years now. The partners have a written partnership agreement. The following information was extracted from the accounting records of Adax. Design Services for the financial year ended 28 February 2021:

QUESTION THREE [20] Adax Designs Services is a partnership with Adam and Max as partners. The partnership has been operating successfully for a number of years now. The partners have a written partnership agreement. The following information was extracted from the accounting records of Adax. Design Services for the financial year ended 28 February 2021:

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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QUESTION SIX The following trial balance has been extracted from the books of Gum and Mum as at 31 March 2021; Gum and Mum are in partnership sharing profits and losses in the ratio 3 to 2: Capital accounts: K K Gum 10,000 Mum 5,000 Cash at bank 1,550 Accounts payable 500 Current accounts:…
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Chapter 2: Partnerships Exercise - 1 Computing initial partner investments Careem and Labeeb establish an equal partnership in both cquity and profits to operate a used- furniture business under the name of C&L Furniture. Careem contributes furniture inventory that cost $120,000 and has fair value of $160,000. Labceb contributes $60,000 cash and delivery cquipment that cost $80,000 and has a fair valuc of $60,000. Required: Assume that the initial noncash contributions of the partners are recorded at fair market value. A) Compute the ending balance of cach capital account under the bonus and goodwill approaches. B) Prepare the journal entries of the initial investments under both approaches.
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Problem 2 At April 30, partnership capital of EASCY ANG BM 99.5 Company are Mr. Easy P 52,000, Mr. Ang, P 48,000 and Mr. BM 99.2 P 18,000. The income sharing ratios are 5:4:1, respectively. On May 1, the EASY ANG BM 99.2 Company is formed by admitting Mr. PAPASA AKO to the firm as a partner. Instructions a. Journalize the admission of Mr. PAPASA AKO under each of the following independent assumptions. 1. Mr. PAPASA AKO purchase 50% of Mr. BM 99.2's ownership interest by paying him P 16,000 in cash. a. Mr. PAPASA AKO purchase 33 1/3% of Mr. Ang's ownership interest by paying him P 15,000 in cash b. Mr. PAPASA AKO invest P 62,000 ofr a 30% ownership interest, and bonuses are given to the old partners. C. Mr.PAPASA AKO invest P 42,000 for a 30% ownership interest, which includes a bonus to the new partner. 2. Mr. Ang's capital balance is P 32,000 after admitting Mr. PAPASA AKO to the partnership by investment. IF Mr. Ang's ownership interest is 20% of total partnership capital, what were…
Required information Problem 12-3A (Algo) Allocating partnership income LO P2 Skip to question [The following information applies to the questions displayed below.] Ries, Bax, and Thomas invested $58,000, $74,000, and $82,000, respectively, in a partnership. During its first calendar year, the firm earned $361,500. Required: Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $361,500 net income under each of the following separate assumptions.
Required information Problem 12-3A (Algo) Allocating partnership income LO P2 [The following information applies to the questions displayed below.] Ries, Bax, and Thomas invested $58,000, $74,000, and $82,000, respectively, in a partnership. During its first calendar year, the firm earned $361,500. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $361,500 net income under each of the following separate assumptions. Problem 12-3A (Algo) Part 1 1. The partners did not agree on a plan, and therefore share income equally. View transaction list Journal entry worksheet 1 Record the entry to close the income summary account assuming the partners did not agree on a plan, and therefore share income equally. Note: Enter debits before credits. Date December 31 Record entry General Journal Clear entry Debit Credit View general journal