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Required: 1.1 Prepare the current account of Michael as at 30 June 2021. 1.2 Prepare the statement of changes in equity as at 30 June 2021.

Required: 1.1 Prepare the current account of Michael as at 30 June 2021. 1.2 Prepare the statement of changes in equity as at 30 June 2021.

FINANCIAL ACCOUNTING
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 ONE Michael and Pumela are partners in MP Stationers. The list of balances as at 30 June 2021, before additional information was taken into account, is as follows: Description Office furniture and equipment Accumulated depreciation on office furniture and equipment Inventory Bank Debtors control Allowance for credit losses Long-term loan Creditors control Capital: Michael as at 1 July 2020 Capital: Pumela as at 1 July 2020 Current account: Michael as at 1 July 2020 - debit Current account: Pumela as at 1 July 2020 - credit Drawings: Michael - taken during the year Drawings: Pumela - taken during the year Profit for the year 1. 2. 3. Additional information: On 1 July 2020 Michael increased his capital to R150 000. The increase was charged to the payables account in error. 4. 5. 6. 7. Amount 530 000 72 000 568 420 1 350 800 364 560 19 480 456 300 451 200 100 000 150 000 6 500 Required: 1.1 Prepare the current account of Michael as at 30 June 2021. 1.2 Prepare the statement of changes in equity as at 30 June 2021. 10 500 40 000 50 000 1 650 800 Michael earns a salary of R5 000 per month while Pumela earns R6 500 per month. The total salaries paid to Pumela was incorrectly recorded in the debtors control account. The salaries paid to Michael was correctly accounted. Interest of 14% per year must be provided for on the capital. Interest on current accounts must be provided at 8 % per year on the opening balances. Interest of 5% is charged on the drawings. The partners share profits and losses in the ratio of capital contributed at the start of the financial year.
Transcribed Image Text:QUESTION ONE Michael and Pumela are partners in MP Stationers. The list of balances as at 30 June 2021, before additional information was taken into account, is as follows: Description Office furniture and equipment Accumulated depreciation on office furniture and equipment Inventory Bank Debtors control Allowance for credit losses Long-term loan Creditors control Capital: Michael as at 1 July 2020 Capital: Pumela as at 1 July 2020 Current account: Michael as at 1 July 2020 - debit Current account: Pumela as at 1 July 2020 - credit Drawings: Michael - taken during the year Drawings: Pumela - taken during the year Profit for the year 1. 2. 3. Additional information: On 1 July 2020 Michael increased his capital to R150 000. The increase was charged to the payables account in error. 4. 5. 6. 7. Amount 530 000 72 000 568 420 1 350 800 364 560 19 480 456 300 451 200 100 000 150 000 6 500 Required: 1.1 Prepare the current account of Michael as at 30 June 2021. 1.2 Prepare the statement of changes in equity as at 30 June 2021. 10 500 40 000 50 000 1 650 800 Michael earns a salary of R5 000 per month while Pumela earns R6 500 per month. The total salaries paid to Pumela was incorrectly recorded in the debtors control account. The salaries paid to Michael was correctly accounted. Interest of 14% per year must be provided for on the capital. Interest on current accounts must be provided at 8 % per year on the opening balances. Interest of 5% is charged on the drawings. The partners share profits and losses in the ratio of capital contributed at the start of the financial year.
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