Prepare the statement of changes in equity

Assignment Help Financial Accounting

Reference no: EM132592222

QUESTION - PARTNERSHIPS

REQUIRED:
Prepare the Statement of changes in Equity for the year ended 28 February 2016.

INFORMATION:
The following information was extracted from the accounting records of LiKim Traders, a partnership owned by partners Lidiwe and Kim.

Balances on 28 February 2016	Debit	Credit
Capital : Lidiwe		300 000
Capital : Kim		150 000
Current Account : Lidiwe ( 01 March 2015)	15 000
Current Account : Kim ( 01 March 2015)		20 000
Drawings : Lidiwe	100 000
Drawings : Kim	125 000

The following must be taken into account:

(a) The net profit for the year, according to the Profit and loss account, amounted to R300 000.

(b) The partners are entitled to interest on capital on their capital balances at 15% per annum. Note that Lidiwe increas€ her capital contribution by R100 000 whilst Kim decreased her capital contribution by the same amount on 31 Augu 2015. The capital changes have been recorded.

(d) Lidiwe is entitled to a special bonus of R15 000,

(e) The balance of the profit must be shared between Lidiwe and Kim in the ratio 3:2 respectively. NB: Use the format given below, as a guide to answer this question.

Reference no: EM132592222

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