ZIMSEC O Level Principles of Accounting: 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
| $ | $ | $ | |
| Sales | 508 000 | ||
| Less Returns | 6 000 | ||
| Net Turnover | 502 000 | ||
| Less Cost of Sales | |||
| Opening Stock | 75 000 | ||
| Purchases | 383 000 | ||
| Carriage Inwards | 21 500 | ||
| 404 500 | |||
| Less Purchases Returns | (12 000) | ||
392 500 | |||
| 467 500 | |||
| Closing Stock | 68 000 | ||
| Drawings | 1 130 | ||
(69 130) | |||
(398 370) |
|||
| Gross Profit | 103 630 | ||
| Add Discount Received | 1 000 |
||
| 104 630 | |||
| Less Expenses | |||
| Salaries | 42 900 | ||
| Office Expenses | 7 500 | ||
| Carriage Outwards | 3 000 | ||
| Advertising | 5 000 | ||
| Discount Allowed | 1 2000 | ||
| Repairs and Renewals | 2 800 | ||
| Less prepayment | (200) | ||
| 2 600 | |||
| Bad Debts | 1 400 | ||
| Fixtures and Fittings Depreciation | 1 500 | ||
| Increase in provision for doubtful debts | 4 00 | ||
(65 500) |
|||
| Net Profit | 39 130 | ||
| Add Interest on drawings: | |||
| Save | 360 | ||
| Moyo | 240 | ||
| 640 | |||
| Interest on current Account: Moyo | 30 |
||
| 39 800 | |||
| Less Interest on Capital: | |||
| Moyo | 5 000 | ||
| Save | 2 500 | ||
| 7 500 | |||
| Interest on Current Account: Save | 100 | ||
| Salaries | |||
| Save | 12 000 | ||
| Moyo | 8 000 | ||
20 000 | |||
| 27 600 | |||
| Profit Balance | 12 200 |
||
| Profit Shares | |||
| Save | 6 100 | ||
| 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 Principles of Accounts Notes.
