Question

QUESTION 1 PARTNERSHIP
Use the information extracted from the accounting records of LS TRADING, a partnership owned by partners, LONG and SHORT, and prepare the Statement of Changes in Equity for the year ended 28 February 2017.
NB: copy the format given below in your answer book.
INFORMATION:
1.
Extracts from the Trial Balance on 28 February 2017.
Accounts
Debit
Credit
Capital : Long
300 000
Capital : Short
300 000
Current Account : Long
3 000
Current Account : Short
11 000
Drawings : Long
225 000
Drawings : Short
255 000
2. The net profit on 28 February 2017 amounted to R500 000.
3. The partnership agreement made provision for the following:
 Partners are entitled to the following monthly salaries :
Long, R9 500
Short, R11 000
 Interest on each partner’s capital must be provided at 12% p.a.
NB: Partners had made the following changes to their capitals during the year and were properly recorded:
 Long decreased his capital by R60 000 on 01 June 2016.
 Short increased his capital by R60 000 on 01 September 2016.
 Short is entitled to a special bonus of 10% of the net profit for the year.
 Partners are to share any remaining profits / losses equally.
2
&&
LS TRADING
Statement of Changes in Equity for the year ended 28 February 2017.
CAPITAL ACCOUNTS
Long
Short
Total
Balance on 01 March 2016
Changes in capital
Balance on 28 February 2017
CURRENT ACCOUNTS
Long
Short
Total
Balances on 01 March 2016
Net profit for the year
Interest on capital
Salaries
Bonus
Interest on drawing
Share of remaining profit / loss
Drawings
Balances on 28 February 2017

Answer 1

Format is not given, so I prepared it in the following format.

Note. It is assumed that capital balance of capital given after effecting the decrease or increase in capital.

If it is the Beginning Capital: