Lan, Zaza and Hasdi are partners of trading business which focus on selling children's shoes. They set up a business with the name of Lazadi Enterprise last year. The business financial year ends on 31 December each year. Below are the agreement and the transactions for the year ended 31 December 2015: 1. 2. 3. 4. They agreed to share profits and losses according to Section 26 of Partnership Act 1961. Interest on opening capital is to be allowed at 10% per annum and interest is to be charged at 8% per annum on all drawings made. All partners are entitled to receive a monthly salary of RM1,500. At the end of the accounting period, only Lan took RM15,000 of his salary. -1- Hasdi has also agreed to give a loan of RM20,000 to the partnership business on 1 January 2015. Hak Cipta Universiti Teknologi MARA CONFIDENTIAL The partners' capital and current accounts as of 1 January 2015 are as follows. Current a/c RM 8,000 (1,000) 3,500 Lan Zaza Hasdi On 10 July 2015, Zaza contributed RM10,000 cash as additional capital to the partnership. Capital a/c RM 50,000 40,000 35,000 The partners' drawing during the year to 31 December 2015 were as follows: 4- Lan Hasdi Gross profit Less: RM 4,000 3,500 The partnership net profit for the year ended 31 December 2015 is calculated as follows: Month 1 June 2015 1 October 2015 Interest on loan from Hasdi General expenses RM 90,100 (1,600) (9,900) 7. a. The partnership net profit for the year ended 31 December 2015 is calculated as follows: Required: C. Gross profit Less: Interest on loan from Hasdi General expenses Net Profit RM 90,100 (1,600) (9,900) 78,600 This net profit does not include the depreciation expenses amounted to RM5,500. 4- Appropriation statement for the year ended 31 December 2015. (8 marks) b. Partners' current and capital accounts for the year ended 31 December 2015. (5 marks) Explain the difference between fixed and fluctuating capital accounts in a partnership business. (2 marks) (Total: 15 marks)
