Accounting 9706 · AS & A Level · Preparation of financial statements
Preparation of financial statements — practice question
Darius and Ewan are partners who share profits and losses in the ratio $5:3$. The balances set out below were taken from the partnership books of account at 31 July 2022. On 1 August 2022, the partners agreed to bring Karim into the partnership on the terms given.
(a)[5]
Prepare the partners’ capital accounts on 1 August 2022 after Karim has been admitted.
(b)[6]
Prepare the partnership statement of financial position at 1 August 2022 after Karim’s admission. Use the space on page 11 for your workings.
(c)[2]
State one advantage of interest on capital for:
(i) partner
(ii) partnership
(d)[2]
Explain one reason why a partnership might charge interest on drawings.
Worked solution & mark scheme
This 15-mark question has a full step-by-step worked solution and mark scheme.