Partnership Balance Sheet
Is similar, in most respects, to that of any other business. It shows the assets and liabilities of the partnership. The difference between the balance sheet of a partnership and that of a sole trader or limited company is in the capital section; there will be a capital account for each of the partners. The capital accounts may be fixed or fluctuating.
Worked example
Using the information above regarding Trevor and Eunice.
Required:
A balance sheet extract showing the capital account details for both partners at 31 October 20*9. The partnership maintains fluctuating capital accounts.
Solution:
Trevor and Eunice balance sheet extract at 31 October 20*9
|
£ |
£ |
£ |
Capital accounts |
|
|
|
Trevor: balance at 1 November 20*8 |
|
20 000 |
|
Add salary |
|
2 000 |
|
interest on capital |
|
1 600 |
|
share of profits |
|
24 402 |
28 002 |
|
|
48 002 |
|
Less drawings |
|
26 439 |
|
interest on drawings |
|
160 |
26 599 |
|
|
21 403 |
|
Eunice: balance at 1 November 20*8 |
|
25 000 |
|
Add interest on capital |
2 000 |
||
share of profits |
12 201 |
14 201 |
|
|
39 201 |
|
|
Less drawings |
16 771 |
|
|
interest on drawings |
281 |
17 052 |
22 149 |
The partners may have fixed capital accounts, in which case all appropriations of profit will be credited to partnership current accounts. With current accounts and fixed capital accounts, a balance sheet extract might show:
Capital accounts |
Rodney |
|
40 000 |
|
Stephanie |
|
45 000 |
|
Theresa |
|
30 000 |
Current accounts |
Rodney |
1 286 |
115 000 |
|
Stephanie |
(603) |
|
|
Theresa |
941 |
1 624 |
0 responses on "Partnership Balance Sheet"