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5 marksIncomplete Records and Non-Commercial Accounts

CAPE Accounting Unit 1 · 2016 · Paper 2 · Question 2(a)(ii)

Sian and Amin are partners sharing profits and losses 3:2. Neither takes drawings, but each receives an annual salary of 45,000. Incomplete accounting records provide balances at 31 December 2015: Property, plant and equipment 1,500,000; Inventory at cost 137,500; Accounts receivable (net) 75,000; Accounts payable 195,000; Bank overdraft 24,800; Fixed capital: Sian 800,000, Amin 600,000; Current accounts: Sian ?, Amin ?. Additional information: - All sales are on account; accounts receivable represents one month of sales. - Inventory at 31 December 2015 increased by 10% over inventory at 01 January 2015. - Gross profit is 25% and net profit is 15% of sales. - Partners' closing current account balances are in the ratio 3:2.

Prepare a partnership Statement of Changes in Owners' Equity for the year ended 31 December 2015.

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Other parts of this question

  1. 2(a)(i)Prepare a partnership Statement of Comprehensive Income for the year ended 31 December 2015 including as much detail as possible.[8 marks]
  2. 2(b)(i)List THREE possible reasons why a business partnership may be dissolved.[3 marks]
  3. 2(b)(ii)Explain the difference between a judicial and a non-judicial dissolution of partnership.[4 marks]
  4. 2(b)(iii)Identify THREE steps required to dissolve a partnership.[3 marks]
  5. 2(b)(iv)Identify FOUR benefits of operating as a co-operative.[4 marks]
  6. 2(b)(v)State TWO advantages and ONE disadvantage of a sole proprietorship.[3 marks]
  7. 2(c)(i)Calculate how many shares will be issued if all the rights are taken up. (Show all working.)[2 marks]
  8. 2(c)(ii)Prepare the journal entry (without narrative) to record the rights issue transaction.[3 marks]

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