Question Three Ali and Ranjeet are partners in the Punjabi Deli. The firm has provided the following data as at December 31, 2018 DETAILS DR CR Bank 89,950 Cash 40,300 Land and Building 550,000 Provision for Depreciation on Building 45,000 Machinery and Equipment 132,000 Provision for Depreciation on Machinery & Equipment 13,200 Capital Ali 300,000 Capital Ranjeet 100,000 Current Account Ali 10,000 Current Accounts Ranjeet 80,000 Drawings Ali 30,000 Drawings Ranjeet 20,000 Sales 640,000 Wages and Salaries 60,000 Telephone 8,000 Discount Received 12,000 Loan Interest 12,000 Creditors 60,000 Return Inwards 13,000 Rent Received 24,000 Purchases 352,250 Debtors 64,000 Provision for Bad Debts 3,900 10% Loan 300,000 Commission Received 50,000 Opening Stock 34,600 Insurance 27,000 Office Expenses 25,000 1,548,100 1,548,100 Additional details available a. Stock at the end of the year was values at 95,000 b. Wages is prepaid by $12,000 c. Insurance is owing by $7,000 d. Rent Received is owing by 8,000 e. Commission is prepaid by 10,000 f. The provision for bad debts is to be revised to 10 % of debtors g. Provide for depreciation as follows - Land and building 5% Straight Line - Machinery and equipment 5% Reducing Balance Details from the partnership agreement included the following : - Interest is to be charged on drawing at 10 % p.a. - Interest is to be paid on capital at 10% p.a. - Ali is to be paid a salary of $57210 p.a. - The partners will share profit and loss in the same ratio as their capital Required : 1. Explain the relevance and relationship between the Partnership Act and the Partnership Deed or Articles of Partnership 2. State the characteristics of a partner that is classified as a. General Partner b. Silent Partner c. Limited Partner 3. Prepare the following a. Statement of Profit and Loss and Appropriation Account b. The Partners Current Account c. The Statement of Financial Position

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question Three Ali and Ranjeet are partners in the Punjabi Deli. The firm has provided the following data as at December 31, 2018 DETAILS DR CR Bank 89,950 Cash 40,300 Land and Building 550,000 Provision for Depreciation on Building 45,000 Machinery and Equipment 132,000 Provision for Depreciation on Machinery & Equipment 13,200 Capital Ali 300,000 Capital Ranjeet 100,000 Current Account Ali 10,000 Current Accounts Ranjeet 80,000 Drawings Ali 30,000 Drawings Ranjeet 20,000 Sales 640,000 Wages and Salaries 60,000 Telephone 8,000 Discount Received 12,000 Loan Interest 12,000 Creditors 60,000 Return Inwards 13,000 Rent Received 24,000 Purchases 352,250 Debtors 64,000 Provision for Bad Debts 3,900 10% Loan 300,000 Commission Received 50,000 Opening Stock 34,600 Insurance 27,000 Office Expenses 25,000 1,548,100 1,548,100 Additional details available a. Stock at the end of the year was values at 95,000 b. Wages is prepaid by $12,000 c. Insurance is owing by $7,000 d. Rent Received is owing by 8,000 e. Commission is prepaid by 10,000 f. The provision for bad debts is to be revised to 10 % of debtors g. Provide for depreciation as follows - Land and building 5% Straight Line - Machinery and equipment 5% Reducing Balance Details from the partnership agreement included the following : - Interest is to be charged on drawing at 10 % p.a. - Interest is to be paid on capital at 10% p.a. - Ali is to be paid a salary of $57210 p.a. - The partners will share profit and loss in the same ratio as their capital Required : 1. Explain the relevance and relationship between the Partnership Act and the Partnership Deed or Articles of Partnership 2. State the characteristics of a partner that is classified as a. General Partner b. Silent Partner c. Limited Partner 3. Prepare the following a. Statement of Profit and Loss and Appropriation Account b. The Partners Current Account c. The Statement of Financial Position

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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