Assume that Gilbert and Bufton (see Activity 6.1) started the year with capital account balances of £25,900 and £15,750 respectively. During the year, Gilbert drew out £35,000 from the partnership and Bufton took £17,000.
Show the relevant extract from the partnership’s statement of financial position as at 31 December 2013.

Question

Accepted Answer

	£	£
Total net assets (details would be provided)		[latex]\underline{49,650}[/latex]
Gilbert’s capital account
Opening balance, 1 January 2013	25,900
Add Salary	12,000
Share of profit	[latex]\underline{28,800}[/latex]
	66,700
Less Drawings	[latex]\underline{(35,000)}[/latex]
Closing capital balance, 31 December 2013		31,700
Bufton’s capital account
Opening balance, 1 January 2013	15,750
Add Share of profit	[latex]\underline{19,200}[/latex]
	34,950
Less Drawings	[latex]\underline{(17,000)}[/latex]
Closing capital balance, 31 December 2013		17,950
		[latex]\underline{49,650}[/latex]

An alternative way of showing the same information is to adopt a ‘columnar’ format, as follows:

	£	£	£
Total net assets (details would be provided)			[latex]\underline{49,650}[/latex]

Capital accounts	Gilbert	Bufton
Opening balances	25,900	15,750
Add Fixed salary to Gilbert	12,000	--
Shares of profit	[latex]\underline{28,800}[/latex]	[latex]\underline{19,200}[/latex]
	66,700	34,950
Less Drawings	[latex]\underline{(35,000)}[/latex]	[latex]\underline{(17,000)}[/latex]
Closing balances	[latex]\underline{31,700}[/latex]	[latex]\underline{17,950}[/latex]	[latex]\underline{49,650}[/latex]

Question 6.2: Assume that Gilbert and Bufton (see Activity 6.1) started th...

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