Prepare the capital accounts, Cost Accounting

Shirley and Ken are in partnership, trading in the construction industry. The year end for the partnership business is 30 June.

You are the Assistant Accountant and have been asked by the Accountant to assist him in preparing the financial statements for the year ended 30 June 2011.

You have the following information about the partnership:

The partners are Shirley and Ken.

  • Their capital account balances as at 1 July 2010 were:

                   -    Shirley       £32,000

                   -    Ken           £57,000

  • Partner's current account balances as at 1 July 2010 were:

                     -    Shirley       £1,900 Cr

                     -    Ken              £400 Dr

  • Partner's annual salaries:

                    -    Shirley       £7,500

                    -    Ken           £9,500

  • Partners' interest on capital is charged at 3% per annum on the capital account balances at the start of the year and from when a new partner joins the partnership.
  • Reeny was admitted to the partnership on 1 January 2011 when she introduced £25,500 into the business' bank account.
  • The profit sharing ratio, effective until 31 December 2010 was:

                -  Shirley        45%

                -    Ken           55%

  • The profit sharing ratio, effective from 1 January 2011 was:

               -    Shirley                   40%
               -    Ken                       45%
               -    Reeny                    15%

  • Goodwill was introduce into the partner's capital accounts at a valued of £27,500 and then eliminated on 1 January 2011.
Posted Date: 2/16/2013 3:14:58 AM | Location : United States







Related Discussions:- Prepare the capital accounts, Assignment Help, Ask Question on Prepare the capital accounts, Get Answer, Expert's Help, Prepare the capital accounts Discussions

Write discussion on Prepare the capital accounts
Your posts are moderated
Related Questions
Herrestad Company does produce and sell two products and the details below will be used to prepare a segmented income statement (showing the income for each product and the total)


Shortflower Ltd currently publishes, prints and distributes a range of catalogues and instruction manuals. The management has now decided to discontinue printing and distribution a

Chemical Recovery Company uses common machinery to manufacture two products.  Each year, the company has a total of four productions runs, which is two production runs for each pro



What are the importance of cost classification

Q. A firm's total cost function is given by TC = 2Q 2 + 10. What are the firm's fixed cost, variable cost, average fixed cost, average variable cost, and marginal cost functions?

Planned                            Actual                Production                                                         92,000 units                     87,000 units