Question

The following information was taken from the books of Fox & Trot: Balances in the general ledger of Fox & Trot at the financial year end 30 June 2017.                                                                                   

Accounts	Debit(R)	Credit(R)
Capital: H Fox		60 000.00
Capital: M. Trot		55 000.00
Current: H Fox (1 July 2016)	12 000.00
Current: M. Trot		11 000.00
Drawings: H Fox	6 000.00
Drawings: M. Trot	5 500.00
Net profit for the year( profit and loss)		345 000.00
Property, plant and equipment	447 500.00

Appropriations according to the partnership agreement at the financial year end 30 June 2017:

1. Interest on capital must be appropriated at 13% per annum. Capital account balances remain constant.

2. Interest on drawings must be appropriated at 14% per annum, as if the drawings were made 2 months prior to the end of the financial year.

3. Interest on current accounts must be appropriated at 12% per annum (on opening balances).

4. Both partners must receive an annual salary at the end of the financial year:

   * H. Fox - R 27 600.00

* M. Trot - R 24 150.00

5. M. Trot must receive an annual bonus at the end of the financial year: R41 400.00

6. The remaining profit must be split between the partners in the following ratio:

   * H. Fox - 3

* M. Trot - 2

REQUIRED:

Journalise the year end adjustments and appropriations(including closing transfers) in the general journal of Fox & Trot for the year ended 30 June 2017.

NB: Narrations must be provided for all journal entries.

      

Answer 1