3. Financial accounting (A Level)
A section of Accounting, 9706
Listing 10 of 734 questions
For Examiner's Use Alec and Jean were in partnership with capitals of $90 000 and $60 000 respectively. On 1 June 2012 Alec had a debit balance on his current account of $2900 and Jean had a credit balance on her current account of $3100. On 31 May 2013 Alec had a credit balance on his current account of $3000 and Jean had a credit balance on her current account of $340. The partnership agreement stated: Interest on capital is payable at 5% per annum. Interest on drawings is charged at 8% per annum. Annual partnership salaries were Alec $14 000 and Jean $12 000. Profits and losses are to be shared in the ratio of capital invested. Alec withdrew $20 000 and Jean $22 000 during the year. REQUIRED Prepare the current account of each partner for the year ended 31 May 2013. For Examiner's Use Calculate the profit for the year ended 31 May 2013 before appropriation. Explain the term goodwill. For Examiner's Use On 1 June 2013 Alec and Jean agreed to admit Chris as a new partner. It was agreed that Chris would pay cash into the business for goodwill. Goodwill was valued at $36 000. In addition Chris also introduced a motor vehicle valued at $12 150 and inventory of $5850. The partners agreed that profits and losses are to be shared between Alec, Jean and Chris in the ratio of 3:2:1. No goodwill account is to be maintained on the books. REQUIRED Prepare the capital accounts of Alec, Jean and Chris after Chris’s admission to the partnership.
9706_w13_qp_22
THEORY
2013
Paper 2, Variant 2
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Questions Discovered
734