Financial Statements of a partnership

​ ​ ​ ​ ​ ​ ​ ​ ​ ​​Annita and Bancy are in partnership sharing profits and losses in the ratio 3:2 after charging annual salaries of Sh.1,200,000 and Sh.1,500,000 to Annita and Bancy respectively. Both partners are allowed one time interest at a rate of 4% on opening capital accounts. 

​ ​ ​​Kilimo Enterprises commenced its operations on 1 January 2021. The firm acquired several items of plant for its use. 

​ ​ ​Oliver and Karen were partners in a business of selling school uniforms sharing profit or loss in the ratio of 3:2 respectively after allowing interest on capital at the rate of 10% per annum. 

​ ​ ​​Ann, Ben and Chad have been operating a partnership business under the name ABC Traders. Their partnership agreement provides for a profit or loss sharing ratio of 5:3:2 respectively. 

​ ​ ​​Melody and Olivia commenced a partnership business on 1 January 2023 sharing profit or loss in the ratio of 2:1 after allowing interest on the capital introduced by the partners at a rate of 10% per annum. Olivia was to receive a salary of Sh.80,000 per month starting from 1 February 2023. Melody and Olivia, have not employed a qualified accountant, hence the business lacks complete accounting records. 

​ ​ ​ ​ ​​Dadu, Elegwa and Fondo have been operating a retail business as partners. The partnership agreement provides that:

​ ​ ​ ​​Peter Mwangi and Aloyce Onyango began trading as Pengo Manufacturers on 1 January 2022. 

​ ​ ​​Kate, Mercy and Nickson have been trading as partners under the name Komon Partnership. The partners share profits and losses in the ratio of 4:3:2 respectively. On 1 November 2021, an employee, Oliver, was admitted as a partner. He was to bring Sh.1,750,000 as capital and Sh.1,680,000 as his share of goodwill. The partners do not intend to open a goodwill account. The admission of Oliver has not been fully recorded in the books of account other than the cash record.

Statement of profit or loss for the year ended 30 September 2021

Partners' current accounts.

Statement of financial position as at 30 September 2021.

​ ​ ​ ​​ Peter and John have been trading in partnership for several years sharing profits and losses equally after allowing interest on their capitals at the rate of 8% per annum. On 1 September 2020, the Director of their business, James, was admitted as a partner and was to share one fifth of the profits after interest on capital. Peter and John were to share the balance of the profits equally but guaranteed that James’s share would not fall below Sh.1,200,000 per annum.

James was not required to introduce any capital at the date of admission but agreed to retain Sh.300,000 of his profit share at the end of each financial year to be credited to his capital account until the balance reached Sh.1,500,000. Until that time, no interest was to be allowed on his capital.

Goodwill was agreed at Sh.3,000,000 as at 1 September 2020, but was not to be maintained in the accounts. Land and
buildings were professionally valued at Sh.5,680,000 on the same date while the book value of equipment and motor vehicles was to be reduced to Sh.3,000,000 as at that date.

James was previously entitled to a bonus of 5% of the gross profit. This bonus was payable half yearly. The Director’s bonus
and the Director’s salary were to cease when he became a partner.

The trial balance below was extracted as at 31 December 2020. No adjustments had yet been made in respect of James’s
admission and the amount he introduced as his contribution for goodwill had been posted to his current account. The drawings of all the partners had been charged to their current accounts. (a) Profit or loss and appropriation account for the year ended 31 December 2020.

Statement of financial position as at 31 December 2020.

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Partners' current accounts.

​​ Statement of profit or loss and appropriation account in columnar form for the two periods ended 30 June 2020 and 31 December 2020.

Statement of profit or loss and appropriation account in columnar form for the two periods ended 30 September 2019 and 31 March 2020.

Partners' capital accounts.

Partners currency a/c

Statement of financial Position as at 31 March 2020

In the measurement of profit, partnership salaries are treated as an appropriation while directors' fees on the other hand, are treated as an expense.

Partners' current accounts as at 31 March 2019.

Statement of financial position as at 31 March 2019.

Income statement for the year ended 31 March 2019.

​ ​ ​​ Income and appropriation statement for the year ended 30 September 2018.

Partners' current accounts as at 30 September 2018

​ ​ ​​ Statement of financial position as at 30 September 2018.

Statement ot financial position as at 30 April 2017

​​ Income statement and appropriation account for the year ended 30 April 2017.

Distinguish between partners' capital accounts and partners' current accounts.

​​ Statement of financial position as at 30 April 2016.

​ ​​ Income statement for the year ended 30 April 2016.

​​ Outline five contents of a partnership deed.

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​​ (i) Income statement for the year ended 31 August 2015.
(ii) Statement of financial position as at 31 August 2015.