IGCSE Accounting Paper-1: Specimen Questions with Answers 313 - 314 of 338

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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

Sara and Zara Are in Partnership
On 1 April 2018Dollar $
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 313 (1 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

Capital Accounts
DateDetailsSara $Zara $DateDetailsSara $Zara $

Sara and Zara

Current Accounts

Current Accounts
DateDetailsSara $Zara $DateDetailsSara $Zara $

Explanation

Sara and Zara

Capital Accounts

Sara and Zara Capital Accounts
DateDetailsSara $Zara $DateDetailsSara $Zara $
2019

March

31

Balance c/d48000150002018

April 1

Balance b/d4000015000
2019

Jan 1

Cash8000
48000150004800015000
2019

April 1

Balance b/d4800015000

Sara and Zara

Current Accounts

Sara and Zara Current Accounts
DateDetailsSara $Zara $DateDetailsSara $Zara $
2018

April 1

Balance b/d30002018

April 1

Balance b/d4500
2019

March 31

Drawings500035002019

March 31

Interest on Capital50401800
Balance c/d138924108Salary4800
Share of Profit93524008
18892106081889210608
2019

April 1

Balance b/d138924108

Question 314 (2 of 4 Based on Passage)

Question

MCQ▾

In the absence of any agreement regarding the same, specify the rules relating to the following:

(Marks 4)

Choices

Choice (4)

a.

Salary to a Partner

b.

Sharing of Profits & Losses

c.

Interest on Partners Drawings

d.

Interest on partners capital

Answer

c.

Explanation

  • Sharing of Profits & Losses- In the absence of any agreement on profit sharing ratio, profit will be shared equally.
  • Interest on Partners Capital- In the absence of agreement for interest on capital, Interest on Partners capital will not be given.
  • Interest on Partners Drawings- Interest on Drawings will not be charged
  • Salary to a Partner- In the absence of prior agreement, no partner will be entitled for getting any salary for his work even if the other is non-working.

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