The following were the balance of the partnership between Reynolds and Wynter as at December 31, 2015. DR $ CR $ Capital on January 1, 2015 Reynolds 35,000 Wynter 35,000 Current accounts on January 1, 2015 Reynolds 1,700 Wynter 400 Drawings during the year Reynolds 8000 Wynter 6400 Land and building .........................................160 000 Equipment .......................................................15000 Cash and bank .................................................20000 Bank loan .................................................................. 90,000 Electricity ..........................................................1400 Office salaries .................................................40000 Advertising ......................................................30000 Bad debts .............................................................700 Provision for bad debts ............................................. 700 Debtors ..............................................................6000 Creditors .................................................................... 9,500 Provision for depreciation: equipment ...................... 2,000 Stock on Dec. 31, 2015 ...................................30000 Gross profit for the year ............................................ 150,000 Additional information available includes: The provision for bad debts is to be increased by $150 The amount of advertising includes a payment of $220 for 2014 iii.There is an electricity bill of $150 due Equipment is to be depreciated at 10% on cost per annum Interest on capital is allowed at 15% per annum Interest on drawings is 6 % per annum vii. Profits and losses are to be shared in the ratio 4: 6 between Reynolds and Wynter Draft the Profit and Loss and Appropriation Account for the year ended December 31. Write up the current accounts of Reynolds and Wynter.
The following were the balance of the
DR $ CR $
Capital on January 1, 2015
Reynolds 35,000
Wynter 35,000
Current accounts on January 1, 2015
Reynolds 1,700
Wynter 400
Drawings during the year
Reynolds 8000
Wynter 6400
Land and building .........................................160 000
Equipment .......................................................15000
Cash and bank .................................................20000
Bank loan .................................................................. 90,000
Electricity ..........................................................1400
Office salaries .................................................40000
Advertising ......................................................30000
Provision for bad debts ............................................. 700
Debtors ..............................................................6000
Creditors .................................................................... 9,500
Provision for depreciation: equipment ...................... 2,000
Stock on Dec. 31, 2015 ...................................30000
Gross profit for the year ............................................ 150,000
Additional information available includes:
- The provision for bad debts is to be increased by $150
- The amount of advertising includes a payment of $220 for 2014
iii.There is an electricity bill of $150 due
- Equipment is to be depreciated at 10% on cost per annum
- Interest on capital is allowed at 15% per annum
- Interest on drawings is 6 % per annum
vii. Profits and losses are to be shared in the ratio 4: 6 between Reynolds and Wynter
- Draft the
Profit and Loss and Appropriation Account for the year ended December 31.
- Write up the current accounts of Reynolds and Wynter.
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