IGCSE Accounting Paper-1: Specimen Questions with Answers 314 - 315 of 338
Passage
Sara and Zara are in partnership. The partnership agreement states the following-
That
- The interest on capital is paid at the rate of 12 % per annum.
- The profits and losses are to be shared in the ratio of 7: 3 respectively
- Zara is to receive salary of $ 400 pm
The following information is available
| On 1 April 2018 | Dollar $ |
| Capital Accounts- Sara Zara | 40000 15000 |
| Current Accounts- Sara Zara | 4500 Credit 3000 Debit |
| For the year ended 31 March 2019 Profit for the year Drawings- Sara Zara | 25000 5000 3500 |
On 1 April 2018 $
Capital Accounts
Sara 40000
Zara 15000
Current Accounts
Sara 4500 Credit
Zara 3000 Debit
For the year ended 31 March 2019
Profit for the year 25000
Drawings-
Sara 5000
Zara 3500
On 1 January 2019 Sara introduced additional capital of $ 8000 into the partnership in the form of cash.
Question 314 (2 of 4 Based on Passage)
Describe in Detail
Essay▾Prepare the following capital accounts and current accounts of Sara and Zara for the year ended 31 March 2019. Balance the accounts and bring down the balances on 1 April 2019. (Marks 8)
Sara and Zara
Capital Accounts
| Date | Details | Sara $ | Zara $ | Date | Details | Sara $ | Zara $ |
Sara and Zara
Current Accounts
| Date | Details | Sara $ | Zara $ | Date | Details | Sara $ | Zara $ |
Explanation
Sara and Zara
Capital Accounts
| Date | Details | Sara $ | Zara $ | Date | Details | Sara $ | Zara $ |
| 2019 March 31 | Balance c/d | 48000 | 15000 | 2018 April 1 | Balance b/d | 40000 | 15000 |
| 2019 Jan 1 | Cash | 8000 | |||||
| 48000 | 15000 | 48000 | 15000 | ||||
| 2019 April 1 | Balance b/d | 48000 | 15000 |
Sara and Zara
Current Accounts
| Date | Details | Sara $ | Zara $ | Date | Details | Sara $ | Zara $ |
| 2018 April 1 | Balance b/d | … | 3000 | 2018 April 1 | Balance b/d | 4500 | … |
| 2019 March 31 | Drawings | 5000 | 3500 | 2019 March 31 | Interest on Capital | 5040 | 1800 |
| Balance c/d | 13892 | 4108 | Salary | 4800 | |||
| Share of Profit | 9352 | 4008 | |||||
| 18892 | 10608 | 18892 | 10608 | ||||
| 2019 April 1 | Balance b/d | 13892 | 4108 |
Question 315 (3 of 4 Based on Passage)
Write in Short
Short Answer▾What is partnership? Explain briefly any two characteristics of Partnership form of business. (Marks 3)
Explanation
- Partnership is an agreement between two or more persons come together to run a business jointly by all or any one of them acting for all and agreed to share the profits or losses of the same.
- The two characteristics of partnership are-
- Two or More Persons- To form a partnership, there must be atleast two persons coming together for a common goal.
- Unlimited Liability- In partnership business, the liability of partner is unlimited. That is if there is any obligation of the firm to a third party, the personal assets of the partners may also be utilized towards the payment of the same.