Partnership Accounts
Session 4
Partnership Accounts
Aims
This unit is about the learner being able to
prepare final accounts for both sole traders and
unlimited partnerships, including the
appropriation of profits.
Learners will be able to draft final accounts and
make necessary adjustments according to
current financial standards
Partnership Accounts
Learning outcomes
By the end of the sessions all leaners will be
able to correctly complete a Statement of
Financial Position for a Partnership
Statement of Financial Position
The statement of financial position of a partnership must show
the year end balances on each partner’s capital and current
account.
The transactions can be shown in summary form.
Statement of financial position
These are shown in the “financed by” section of the statement
All other sections of the statement of financial position are
prepared the same as a sole trader.
SFP Example Layout
Financed by
SFP Example Layout
Financed by
Example
Bob and Bill, in partnership
Statement of financial position (Extract) as at 31 January 20X4
FINANCED BY
Capital Accounts
Current Accounts
Bob
£
Bill
£
Total
£
50,000
60,000
110,000
(500)
1,000
_________ _________
49,500
61,000
________ ________
500
_______
109,500
_______
Worked example – Len & Fred
Task (a) - Appropriation Account
Financial Year Ending 30th September
Profit for appropriation
£
38,000
Salaries
Fred
6,000
Interest on Capital (5%)
Len (£33,000 x 5%)
1650
Fred (20,000 x 5%)
1000
Profit available for distribution
29,350
Profit Share (2:1)
Len (£29350 / 3 x 2)
19567
Fred (£29350 / 3 x 2)
9783
29,350
Worked example – Len & Fred
Current Accounts
Len
Bal b/d
Drawings
Balance c/d
Fred
Len
Fred
500
Bal b/d
1000
17000
14000 Salary
6000
3717
3783
21217
17783
Interest on
Capital
1650
1000
Profit Share
19567
9783
21217
17783
3717
3783
Balance b/d
Worked example – Len & Fred
Statement of Financial Position
Non-current assets:
Motor Vehcles
Fixtures & Fittings
Cost
40000
22000
Acc Depreciation Carrying value
16000
8000
24000
14000
38000
Current assets:
32000
5000
500
16000
SLCA
Bank
Cash
Closing Inventory
53500
Current liabilities:
21000
10000
PLCA
Loan
31000
60500
Total net assets
Financed by
Capital Account
Current Account
Total
Len
33000
3717
36717
Fred
20000
3783
23783
Total
53000
7500
60500
Non-current assets:
Motor Vehcles
Fixtures & Fittings
Cost
40000
22000
Acc Depreciation Carrying value
16000
8000
24000
14000
38000
Current assets:
32000
5000
500
16000
SLCA
Bank
Cash
Closing Inventory
53500
Current liabilities:
21000
10000
PLCA
Loan
31000
60500
Total net assets
Financed by
Capital Account
Current Account
Total
Len
33000
3717
36717
Fred
20000
3783
23783
Total
53000
7500
60500
Practice Questions