QUESTION ONE (30 MARKS)
The following information was taken from the books of Nhlakanipho & Shaun: Balances in the general ledger of Nhlakanipho & Shaun at the financial year end – 31 March 2019
Account Debit (R) Credit (R)
Capital: Nhlakanipho(1April2016) 95 000.00
Capital: Shaun(1April2016) 80 000.00
Current:Nhlaka(1April2016) 19 000.00
Current: Shaun(1April2016). 16 000.00
Drawings: Nhlakanipho 9 500.00
Drawings: Shaun 8 000.00
Replacement reserve 105 000.00
Profit and loss. 525 000.00
Property, plant & equip 784 500.00
Appropriations according to the partnership agreement at the financial year end 31 March 2019:
1. Interest on capital must be appropriated at 8% per annum. Capital account balances remain constant.
2. Interest on drawings must be appropriated at 15% per annum, as if the drawings were made 7 months prior to the end of the financial year.
3. Interest on current accounts must be appropriated at 11% per annum (on opening balances).
4. Both partners must receive an annual salary at the end of the financial year:
• Nhlakanipho – R 36 750.00
• Shaun – R 73 500.00
5. Shaun must receive an annual bonus at the end of the financial year: R 42 000.00
6. R 63 000.00 is to be transferred to the general reserve at the financial year-end.
7. The remaining profit must be split between the partners in the following ratio:
• Nhlakanipho – 4
• Shaun – 3
REQUIRED:
Open, post to and balance the following accounts in the general ledger of Nhlakanipho & Shaun for the year ended 31 March 2019.
1.1.Appropriation account (10)
1.2.Current: Nhlakanipho (10)
1.3.Current: Shaun (10)
