Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Accounting for Partnerships: Partnership Financial Statements Example

  • This is the first part solution to the question that was posted here
  • It examines the basic structure of Financial Statements of partnerships
  • In this part we will look at the Income Statement and Appropriation Account for Save and Moyo

Solution

Save and Moyo

Income Statement and Appropriation Account for the year ended 31 December 20×8

$$$
Sales508 000
Less Returns

6 000
Net Turnover502 000
Less Cost of Sales
Opening Stock75 000
Purchases383 000
Carriage Inwards

21 500
404 500
Less Purchases Returns

(12 000)

392 500
467 500
Closing Stock68 000
Drawings

1 130

(69 130)

(398 370)
Gross Profit103 630
Add Discount Received

1 000
104 630
Less Expenses
Salaries42 900
Office Expenses7 500
Carriage Outwards3 000
Advertising5 000
Discount Allowed1 2000
Repairs and Renewals2 800
Less prepayment

(200)
2 600
Bad Debts1 400
Fixtures and Fittings Depreciation1 500
Increase in provision for doubtful debts

4 00

(65 500)
Net Profit39 130
Add Interest on drawings:
Save360
Moyo

240
640
Interest on current Account: Moyo

30
39 800
Less Interest on Capital:
Moyo5 000
Save

2 500
7 500
Interest on Current Account: Save100
Salaries
Save12 000
Moyo

8 000

20 000
27 600
Profit Balance

12 200
Profit Shares
Save6 100
Moyo

6 100

12 200

NB:

  • We have taken care to show as much workings as possible
  • The Statement of Financial Position can be found here

To access more topics go to the Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes.