Required: 1.1 Prepare the current account of Michael as at 30 June 2021. 1.2 Prepare the statement of changes in equity as at 30 June 2021.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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QUESTION ONE
Michael and Pumela are partners in MP Stationers. The list of balances as at 30 June 2021, before
additional information was taken into account, is as follows:
Description
Office furniture and equipment
Accumulated depreciation on office furniture and equipment
Inventory
Bank
Debtors control
Allowance for credit losses
Long-term loan
Creditors control
Capital: Michael as at 1 July 2020
Capital: Pumela as at 1 July 2020
Current account: Michael as at 1 July 2020 - debit
Current account: Pumela as at 1 July 2020 - credit
Drawings: Michael - taken during the year
Drawings: Pumela - taken during the year
Profit for the year
1.
2.
3.
Additional information:
On 1 July 2020 Michael increased his capital to R150 000. The increase was charged to the
payables account in error.
4.
5.
6.
7.
Amount
530 000
72 000
568 420
1 350 800
364 560
19 480
456 300
451 200
100 000
150 000
6 500
Required:
1.1 Prepare the current account of Michael as at 30 June 2021.
1.2 Prepare the statement of changes in equity as at 30 June 2021.
10 500
40 000
50 000
1 650 800
Michael earns a salary of R5 000 per month while Pumela earns R6 500 per month.
The total salaries paid to Pumela was incorrectly recorded in the debtors control account. The
salaries paid to Michael was correctly accounted.
Interest of 14% per year must be provided for on the capital.
Interest on current accounts must be provided at 8 % per year on the opening balances.
Interest of 5% is charged on the drawings.
The partners share profits and losses in the ratio of capital contributed at the start of the
financial year.
Transcribed Image Text:QUESTION ONE Michael and Pumela are partners in MP Stationers. The list of balances as at 30 June 2021, before additional information was taken into account, is as follows: Description Office furniture and equipment Accumulated depreciation on office furniture and equipment Inventory Bank Debtors control Allowance for credit losses Long-term loan Creditors control Capital: Michael as at 1 July 2020 Capital: Pumela as at 1 July 2020 Current account: Michael as at 1 July 2020 - debit Current account: Pumela as at 1 July 2020 - credit Drawings: Michael - taken during the year Drawings: Pumela - taken during the year Profit for the year 1. 2. 3. Additional information: On 1 July 2020 Michael increased his capital to R150 000. The increase was charged to the payables account in error. 4. 5. 6. 7. Amount 530 000 72 000 568 420 1 350 800 364 560 19 480 456 300 451 200 100 000 150 000 6 500 Required: 1.1 Prepare the current account of Michael as at 30 June 2021. 1.2 Prepare the statement of changes in equity as at 30 June 2021. 10 500 40 000 50 000 1 650 800 Michael earns a salary of R5 000 per month while Pumela earns R6 500 per month. The total salaries paid to Pumela was incorrectly recorded in the debtors control account. The salaries paid to Michael was correctly accounted. Interest of 14% per year must be provided for on the capital. Interest on current accounts must be provided at 8 % per year on the opening balances. Interest of 5% is charged on the drawings. The partners share profits and losses in the ratio of capital contributed at the start of the financial year.
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