Homework answers / question archive / Chartered Accountants and Alright as follows: Question 16

Chartered Accountants and Alright as follows: Question 16

Accounting

Share With

Chartered Accountants and Alright as follows: Question 16.1 Harry and Paddy have carried on business in partnership for a number of years, sharing profits in the ratio 6:4. No interest on capital was paid. The partnership accounts are prepared annually to 31 December On 1 April 2019, Tony was admitted as a partner, and the terms of the partnership from then were agreed (a) Partners' annual salaries to be: Harry €2,700; Paddy €1,800; Tony €1,650. (b) Interest on capital to be charged at 4% per annum. (c) Profits to be shared between Harry, Paddy and Tony in the ratio 5:3:2. On 1 April 2019 Tony paid €10,500 into the partnership bank account. Of this amount, €3.150 was in respect of the share of goodwill acquired by him. Since the partnership has never created, and does not intend to create a goodwill account, the full amount of €10,500 was credited, for the time being, to Tony's capital account at 1 April 2019. The profit of the partnership for the year ended 31 December 2019 was calculated to be €18,600. Assume that this profit accrued evenly over the year. D'Arcy, Margaret. An Introduction to Financial Accounting Chartered Accountants Ireland. 2015. ProQuest Ebook Central hop.bookcentral proquest.com/lbucci-books dai.action docID-5973837 Created from ucci-books on 2020-07-28 01:06:35. 356 AN INTRODUCTION TO FINANCIAL ACCOUNTING Details of the summarised trial balance as at 31 December 2019 are as follows: Debit € Credit € Freehold premises 18,000 Fixtures and fittings - carrying amount 7.830 Inventories 22.500 Bank 4,636 Trade receivables and payables 41,200 20,596 Allowance for doubtful debts 1,030 Profit for year to 31 December 2019 18,600 Capital Accounts Harry 33,000 Paddy 16,500 Tony 10,500 Current Accounts Harry 3.300 Paddy 1,650 Tony 1.110 100.226 100,226 Requirement Prepare the following accounts: (a) Partners' capital accounts for the year ended 31 December 2019 to reflect the admission of Tony. 9 Minutes (b) Profit or loss appropriation account for the year ended 31 December 2019. 9 Minutes (c) Partners' current accounts for the year ended 31 December 2019. 9 Minutes (Based on Chartered Accountants Ireland, CAP / Financial Accounting Summer 2009. Question 7) ESTIONS - CHAPTER 16