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:
-
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