The following were the balances of the partnership between Crayon and Pencil as at 31 December 2009: DR Capital on 2 January 2009 Crayon Pencil CR 30 000 30 000 Current accounts on 1 January 2009 Crayon Pencil 200 1 500 Drawings during the Crayon Pencil year 6 000 4 400 Land and building. Equipment.. Cash and bank. .160000 .15 000 .20 000 Bank loan. .90 000 .1 400 40 000 Electricity.. Office salaries. Advertising. Bad debts. Provision for bad debts. .30 000 700 700 .6 000 Debtors.... Creditors.... Provision for depreciation: equipment. Stock on 31 December 2009. Gross profit for the year.. 9 500 .2 000 .30000 .150 000 Additional information available includes: i. The provision for bad debts is to be increascd by $50 ii. The amount of advertising includes a payment of $120 for 2004 iii. There is an electricity bill of $145 due iv. Equipment is to be depreciated at 20% on cost per annum v. Interest on capital is allowed at 20% per annum vi. Interest on drawings is 5% per annum vii. Profits and losses are to be shared in the ratio 2:3 between Crayon and Pencil А. Draft the Profit and Loss Appropriation Account for the year ended 31 December 2009.

The following were the balances of the partnership between Crayon and Pencil as at 31 December 2009: DR Capital on 2 January 2009 Crayon Pencil CR 30 000 30 000 Current accounts on 1 January 2009 Crayon Pencil 200 1 500 Drawings during the Crayon Pencil year 6 000 4 400 Land and building. Equipment.. Cash and bank. .160000 .15 000 .20 000 Bank loan. .90 000 .1 400 40 000 Electricity.. Office salaries. Advertising. Bad debts. Provision for bad debts. .30 000 700 700 .6 000 Debtors.... Creditors.... Provision for depreciation: equipment. Stock on 31 December 2009. Gross profit for the year.. 9 500 .2 000 .30000 .150 000 Additional information available includes: i. The provision for bad debts is to be increascd by $50 ii. The amount of advertising includes a payment of $120 for 2004 iii. There is an electricity bill of $145 due iv. Equipment is to be depreciated at 20% on cost per annum v. Interest on capital is allowed at 20% per annum vi. Interest on drawings is 5% per annum vii. Profits and losses are to be shared in the ratio 2:3 between Crayon and Pencil А. Draft the Profit and Loss Appropriation Account for the year ended 31 December 2009.

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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