question archive Carol and Mary are in partnership sharing profits and losses equally
Carol and Mary are in partnership sharing profits and losses equally
Subject:AccountingPrice: Bought3
Carol and Mary are in partnership sharing profits and losses equally. They make handbags under the brand name 'CARY'.
The partnership trial balance as at 31 December 2013 was as follows:
|
Sh. "000" |
Sh. "000" |
|
|
Capital: Carol Mary Drawings: Carol Mary Land Factory building at cost Accumulated depreciation on factory building Delivery vans at cost Accumulated depreciation on delivery vans Inventory (1 January 2013): Raw materials Work in progress |
5,000 4,800 15,200 20,400
8,100
2,300 2,210 |
24,000 24,000
15,370
1,912 |
Sales
Finished goods (10,250 handbags at Sh.2,000 each)
20,500
63,200
Returns inward
Purchase of raw materials
Tax
Factory wages
Office salaries
General expenses: Factory
Office
Plant at cost
Accumulated depreciation on plant
Provision for unrealised profit (I January 2013) Allowance for doubtful debts
Trade receivables and payables
Bank overdraft
112
14,590
7,630
2,500
7,730
9,470
17,220
10,680
148,442
3,960
5,870
2,050
770
2,640
4,670
148,442
Additional information:
1. During the year ended 31 December 2013. 16,727 handbags were transferred to the warehouse at a price of sh.2, 400 each.
2. As at 31 December 2013, inventory was valued as follows:
? Raw materials - Sh.1, 900,000
? Work in progress - Sh.2, 880,000
? Finished goods - Sh.17, 428,800
3. Allhandbags are sold at Sh.3, 200 each.
4. The allowance for doubtful debts is to be maintained at 5% of the trade receivables.
5. Accrued general expenses as at 31 December 2013 were as follows:
? Factory - Sh.1,748,000
? Office - Sh.764, 000
6. As at 31 December 2013, rent and rates were prepaid as follows:
? Factory - Sh.104, 000
? Office - Sh.80, 000
7. Depreciation is to be provided on cost as follows: Asset Rate per annum Factory building 2%
Plant 10%
Delivery vans 20%
8. Carol is entitled to 25% of the manufacturing profit based on the transfer price to the warehouse, while Mary is entitled to 10% of the trading gross profit.
9. No interest is credited or charged on capital accounts or drawings.
Required:
(a) Manufacturing account for the year ended 31 December 2013. (b) Income statement of theyear ended 31 December 2013
(c) Statement of financial position as at 31 December 2013
