Partnership Profit And Loss Account And Balance Sheet of Partners - SS2 Accounting Lesson Note
Question:
Use the following transactions from the partnership of Ayo and Damis’ shop to prepare:
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Trading profit and loss account of the partnership
Partner’s capital account
Balance sheet of the partners
TRIAL BALANCE OF AYO AND DAMIS' SHOP FOR THE YEAR ENDED ON 31 DECEMBER
|
Account Title |
Debit (₦)
Credit (₦)
Cash
25,000
Sales
150,000
Purchases
80,000
Rent Expense
15,000
Salaries Expense
35,000
Insurance Expense
5,000
Office Supplies
1,500
Utilities Expense
6,000
Advertising Expense
8,000
Drawings – Ayo
12,000
Drawings – Damis
8,000
Total
187,500
187,500
Answer:
PARTNERSHIP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER
|
Account Title |
Debit (₦)
Credit (₦)
Sales
Purchases
Rent Expense
Salaries Expense
Insurance Expense
Office Supplies Expense
Utilities Expense
Advertising Expense
Total Expenses
Net Profit
80,000
15,000
35,000
5,000
1,500
6,000
8,000
150,500
99,500
150,000
PARTNERS' CAPITAL ACCOUNT FOR THE YEAR ENDED 31 DECEMBER
|
Account Title |
Ayo (₦)
Damis (₦)
Capital, Jan 1
Add: Net Profit
Less: Drawings
Capital, Dec 31
Total
50000
49700
(12000)
87700
159500
30000
49800
(8000)
71800
231600
BALANCE SHEET AS OF DECEMBER 31
ASSETS ₦Cash 25,000
Inventory 70,000
Prepaid Insurance 4,000
Total Asset 99,000
LIABILITIES AND PARTNERS' EQUITYAccounts Payable 10,000
Ayo's Capital 87,700
Damis' Capital 71,800
Total Liabilities and Partners' Equity 169,500