5.2. Partnerships
A subsection of Accounting, 7707, through 5. Preparation of financial statements
Listing 10 of 31 questions
Akila and Darius are in partnership. The partnership agreement provides for the following: interest on capital of 3% per annum interest on drawings of 5% a salary to Akila of $9500 per annum residual profits and losses to be shared 60% to Akila and 40% to Darius. The partners provided the following list of balances. $ Capital accounts at 1 May 2022 Akila 90 000 Darius 65 000 Current accounts at 1 May 2022 Akila 2 600 debit Darius 4 745 credit Drawings for the year ended 30 April 2023 Akila 19 400 Darius 16 320 The profit for the year ended 30 April 2023 was $42 304. REQUIRED Prepare the appropriation account on the opposite page for Akila and Darius for the year ended 30 April 2023. Prepare Akila’s current account for the year ended 30 April 2023. Akila Current account Date Details $ Date Details $ Calculate the balance on Akila’s current account at 30 April 2023 if he had been due $1000 loan interest from the partnership. Akila and Darius’s partnership agreement provided for salary, interest on capital, interest on drawings, and profit share. State two other items which are usually included in a partnership agreement. Akila and Darius are considering forming a limited company. They would be the only two shareholders in the company. Advise Akila and Darius whether they should form a limited company. Justify your answer with two advantages and two disadvantages of Akila and Darius forming a limited company.
7707_s23_qp_22
THEORY
2023
Paper 2, Variant 2
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Questions Discovered
31