IGCSE Accounting Paper-1: Specimen Questions with Answers 315 - 316 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 315 (3 of 4 Based on Passage)

Write in Short

Short Answer▾

Prepare the P&L Appropriation Account of the firm for the year ended 31 March 2019 (Marks 5)

Sara and Zara

P & L Appropriation a/C for the Year Ended 31 March 2019

P&L Appropriation a/C for the Year Ended 31 March 2019
DetailsDollar $DetailsDollar $

Explanation

Sara and Zara

P & L Appropriation a/C for the Year Ended 31 March 2019

P&L Appropriation a/C for the Year Ended 31 March 2019
DetailsDollar $DetailsDollar $
Interest on Capital (I) :Net Profit25000
Sara- $ 5040
Zara- $ 18006840
Zara՚s Salary (II)4800
Share of profit (III) :
Sara- $ 9352
Zara- $ 400813360
2500025000

Working Notes-

Interest on Capital-
Interest on Capital-Dollar $
Sara-

4800

240

5040

Zara-1800

(I) Interest on Capital- $

Sara- 4800

240

5040

Zara- 1800

(II) Zara՚s Salary-

(III) Divisible Profits

Zara՚s Share

Sara՚s Share

Question 316 (4 of 4 Based on Passage)

Edit

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.

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