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Partnership account example Blair, Short & Steel are in partnership At year ending 31 December 2007 the following information pertained. Net profits £111,100.

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Presentation on theme: "Partnership account example Blair, Short & Steel are in partnership At year ending 31 December 2007 the following information pertained. Net profits £111,100."— Presentation transcript:

1 Partnership account example Blair, Short & Steel are in partnership At year ending 31 December 2007 the following information pertained. Net profits £111,100 Interest to be charged on capitals: Blair £3,000, Short £2,000 & Steel £1,500 Interest to be charged on drawings: Blair £400, Short £300 & Steel £200 Salaries to be credited: Short £20,000 & Steel £25,000 Profits to be shared: Blair 70%, Short 20%, Steel 10% Current account balances b/d: Blair £18,600, Short £9,460, Steel £8,200 Capital account balances b/d: Blair £100,000, Short £50,000, Steel £25,000 Drawings: Blair £39,000, Short £27,100, Steel £16,800 Prepare Profit & Loss Appropriation account for the year ending 31 Dec 2007 and a Balance Sheet extract at that date.

2 Appropriation Account for year ending 31 December 2007 Net Profit111,100 Add Interest on drawings Blair400 Short300 Steel ,000 Less Interest on capitals Blair3,000 Short2,000 Steel1,500 6,500 Salaries Short20,000 Steel25,000 45,000 51,500 Balance of Profits60,500 Shared: Blair 70%42,350 Short 20%12,100 Steel 10%6,050 60,500

3 Balance Sheet for the year ended 31 December 2007(Extracts) Capital Accounts Blair100,000 Short 50,000 Steel 25, ,000 Current AccountsBlairShortSteel Balances ,6009,4608,200 Add Interest on Capital 3,0002,0001,500 Add Salaries20,00025,000 Add Share of Profits42,35012,1006,050 63,95043,56040,750 Less Interest on drawings Less Drawings39,00027,10016,800 24,55016,16023,750 64,460

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