IGCSE Accounting Paper-2: Specimen Questions with Answers 188 - 188 of 189

Passage

Harry and Hermione are in partnership. Their partnership agreement provides that:

1. Partners are entitled to interest on their fixed capitals at 12 % per annum.

2. Partners’ loans carry interest at 10 % per annum.

3. Hermoine is to receive a salary of $6000 a year.

4. Profits and losses are to be shared in the ratio of 5: 3.

For the financial year ended 31 March 2020, balances in the partnership’s books included the following-

The financial year ended 31 March 2020, balances in the partnership’s books The financial year ended 31 March 2020, balances in the partnership’s books

Dr. $

Cr. $

Capital A/cs on 1st April 2019 Harry

35000

Hermione

25000

Fixed Assets at Cost

60000

Gross Profit for the year

32000

Office Expenses

1200

Salaries

3000

Discount Allowed & Received

600

800

Commission Paid

300

The following additional information is also given.

(1) At 31 March 2020:

Advance Salary paid was $1000,

Office expenses accrued were $600.

(2) Depreciation on fixed assets is to be provided at 10 % on cost. Fixed Assets were purchased on 1st July 2019.

(3) On 1st October 2019 Harry made a loan of $8000 to the partnership. No loan interest was paid to Harry in the year ended 31 March 2020.

Question number: 188 (1 of 2 Based on Passage) Show Passage

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Short Answer Question▾

Write in Short

Prepare (Marks 10)

(I) the partnership’s Profit and Loss Account and

(II) the partnership’s Appropriation Account for the year ended 31 March 2020

(I) Harry and Hermione Profit and Loss Account for the year ended 31 March 2020

Explanation

Harry and Hermione

Profit & Loss A/c for the year ended 31 March 2020

Profit & Loss A/c for the year ended 31 March 2020Profit & Loss A/c for the year ended 31 March 2020

$

$

Depreciation

4500

Gross Profit b/d

32000

Office Expenses $1200

Add: Office Exp. Accrued $600

1800

Discount Received

800

Salaries $3000

Less: Advance Salary paid $1000

2000

Discount Allowed

600

Commission

300

Interest on Harry’s Loan

400

Net Profit

23200

32800

32800

Depreciation on Fixed Assets =

Interest on Harry’s Loan =

(II) Appropriation Account for the year ended 31 March 2020

Ans (II) Harry and Hermione

Profit & Loss Appropriation A/c for the year ended 31 March 2020

Profit & Loss Appropriation A/c for the year ended 31 March 2020Profit & Loss Appropriation A/c for the year ended 31 March 2020

$

$

Interest on Capital:

Harry- $4200

Hermione- $3000

7200

Net Profit b/d

23200

Hermione’s Salary

6000

Share in Profits:

Harry- $6250

Hermione- $3750

10000

23200

23200

Interest on Capital:

Harry-

Hermione-

Share in Profits

Harry-

Hermione-

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