Question 2

Bullock and Wayne, who are sole traders, had the following balances on their books on June 30, 2005:

On July 1 2005 they formed a partnership. The following were agreed:

-Profit and losses are to be shared in direct proportion to capital

-Wayne is to receive a bonus of $6,000 for the period for the period ending December 31,2005.

-Interest on capital at the rate of 5 % per annum is to be received by each partner.

Wayne took drawings of $1,600 each month, and Bullock $2,000 each month for the period ending December 31, 2005.

Net Profit for the partnership on December 31, 2005 was $90,000.

Prepare the following:

(a) The Balance Sheet for the Partnership on July 1, 2005

(b) The Appropriations of Profit Accounts for the period

(c) The current accounts for the partners

Previous | Next