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Question -
a. Albertyn holds a three-fifth share in a business. His capital is R120 000 and of of the half yearly profits he is entitled to 9 % interest per annum on his capital, a bonus of 20% of the profit remaining after charging all interest, and three fifths of the balance remaining after deducting bonuses and interest.
b. Bonthuis whose capital is R80 000 is entitled to interest on his capital of 9% pa, a bonus of 10% of the profit remaining after charging all interest and two-fifths of the balance remaining after deducting bonuses and interest.
Drawings: A ALbertyn draws R2 500 AND B. Bonthuis R1.500 at the end of each month.
The profits for the half year ended 31 December 2005 before charging the above items amounted to R50 286.
The partners decided to transfer to reserve R25 000 of their shares of the balance of the profits.
Prepare journal entries in respect of the above items, prepare the appropriation account and show the partners' current accounts.
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