Question

Mwanza and Tasila are in Partnership. They share profits in the ratio: Mwanza 70 per cent ; Tasila 30 per cent. The following trail balance was extracted as at 31^st December 2019.

                                                                                                                        Dr                    Cr

                                                                                                                        ZMK                ZMK

Office equipment at cost                                                                               9,200

Motor Vehicle at cost                                                                                    21,400

Provision for depreciation at 31^st December 2018                                                 

Motor Vehicles             12,800 Office equipment               3,600

Inventory at 31^st December 2018                                                                  38,410

Accounts receivable and accounts payable                                                   41,940         32,216

Cash at Bank                                                                                                  2,118

Cash in hand                                                                                                       317

Sales                                                                                                                                  180,400

Purchases         136,680 Salaries              27,400

Office expenses                                                                                               2,130

Discount allowed                                                                                               312

Current accounts at 31^st December 2018

Mwanza                                                                                                                          7,382 Tasila                                                                                                                             7,009

Capital accounts: Mwanza                                                                                         50,000

                             Tasila                                                                                              20,000

Drawings: Mwanza                                                                             17,500

                 Tasila                                                                                  16,000            _____

                                                                                                            313,40               313,407

                                                                                                           

REQUIRED.

Draw up a set of financial statement for the year ending 31^st December 2019 for the partnership.

The following notes are applicable at 31^st December 2019.

(i) Inventory, 31^st December 2019 ZMK 41,312 (ii) Office expenses owing ZMK 240.

3. Provide for depreciation: motor 25 per cent of cost, office equipment 20 per cent of cost.
4. Charge interest of capital at 5 per cent.
5. Charge interest on drawings: Mwanza ZMK 300; Tasila ZMK200

Answer 1

The Financials statements for the year ending 31-12-2019 comprises of Profit & Loss Account, Profit & Loss appropriation Account, Current Account and Balance Sheet