Question 4

The information given below as extracted from the accountingrecords of Salmon Traders, a partnership business with Sally andMonty as partners. The financial year ends on the last day ofFebruary each year.

Required

4.1 Prepare the following accounts in the general ledger ofSalmon traders:

4.1 Current a/c: Monty (Balance the account)

4.2 Appropriation account Close off the account)

Balances in the ledger on 28 February 2017
	R
Capital: Sally	400 000
Capital: Monty	200 000
Current a/c :Sally (01 March 2016)	20 000   (DR)
Current a/c Monty(01 March 2016)	33 000   (CR)
Drawings :Sally	200 000
Drawings:Monty	180 000

The following must be taken into account:

(a)    The net profitaccording to the Profit and Loss Account amounted to R500 000 on 28February 2017.

(b)    The partnershipagreement makes provision for the following:

·         Interest oncapital must be provided at 15% per annum on the balances in thecapital accounts. Note: Sally increased his capital by R100 000 on01 September 2016.Monty decreased his capital by R100 000 on thesame date. The capital changes have been recorded.

·         The partners areentitled to the following salaries     SallyR12 000/ Monty R13 000.Note: The partner’s salaries were increasedby 10% with effect from 01 December 2016.

·         Sally and Montyshare the remaining profits or losses in the ratio of their capitalbalances as at the beginning off the financial year.