FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Prepare the Statement of Changes in Equity for the year ended 28 February 2021.
INFORMATION
The information given below was extracted from the accounting records of Preston Traders, a
Presley and Tony as partners.
Extract from the
Debit Credit
R R
Capital: Presley 600 000
Capital: Tony 400 000
Current a/c: Presley (01 March 2020) 40 000
Current a/c: Tony (01 March 2020) 50 000
Drawings: Presley 340 000
Drawings: Tony 360 000
The following must be taken into account:
(a) The Statement of Comprehensive Income reflected a net profit of R900 000 on 28 February 2021.
(b) The partners are entitled to interest at 12% p.a. on their capital balances.
Note: Presley decreased his capital by R200 000 on 01 June 2020 whilst Tony increased his capital by
R200 000 on 01 September 2020. These capital changes have been recorded.
(c) The partners are entitled to the following monthly salaries for each of the two six-month periods:
01 March 2020 to 31 August 2020 01 September 2020 to 28 February 2021
Presley R16 000 R17 000
Tony R15 000 R16 000
(d) Tony is entitled to a bonus equal to 5% of the net profit before any of the above appropriations have been taken
into account.
(e) The remaining
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