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 $400pm

The following information is available

Sara and Zara are in partnership. Sara and Zara are in partnership.

On 1 April 2018

$

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 number: 314 (2 of 4 Based on Passage) Show Passage

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Short Answer Question▾

Write in Short

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.

Question number: 315 (3 of 4 Based on Passage) Show Passage

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Short Answer Question▾

Write in Short

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 2019P&L Appropriation A/c for the year ended 31 March 2019

Details

$

Details

$

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 2019P&L Appropriation A/c for the year ended 31 March 2019

Details

$

Details

$

Interest on Capital (I) :

Net Profit

25000

Sara- $5040

Zara- $1800

6840

Zara’s Salary (II)

4800

Share of profit (III) :

Sara- $9352

Zara- $4008

13360

25000

25000

Working Notes-

Interest on Capital- Interest on Capital-

Interest on Capital-

$

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

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