# 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

 On 1 April 2018 \$ Capital Accounts-SaraZara 4000015000 Current Accounts-SaraZara 4500 Credit3000 Debit For the year ended 31 March 2019Profit for the yearDrawings-SaraZara 2500050003500

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

Edit

### 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

Edit

### 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

 Details \$ Details \$

### Explanation

Sara and Zara

P&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- \$ Sara- 48002405040 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