method 2 ACCY112 Spring 2019 71 Date Partner Capital XXX Profit Distribution

Method 2 accy112 spring 2019 71 date partner capital

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(method 2) ACCY112 Spring 2019 71 Date Partner, Capital XXX Profit Distribution XXX charging interest on drawings Date Partner, Capital XXX Profit Distribution XXX charging interest on drawings Date Partner, Retained Earnings XXX Profit Distribution XXX charging interest on drawings Date Partner, Retained Earnings XXX Profit Distribution XXX charging interest on drawings
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LOANS OR ADVANCES Partners may lend money to the partnership on a short term basis rather than investing This represents a liability of the partnership ACCY112 Spring 2019 72 Date Cash at Bank XX Advance from partner A XX (Advance from partner) Date Interest expense XX Cash at bank/Interest Payable XX
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PARTNERSHIP FINANCIAL STATEMENTS These are similar to a Sole Trader or Company, but the capital balance of each partner is shown separately in the Owners’ Equity section of the Statement of Financial Position. If a partnership is not a reporting entity, it will prepare special-purpose financial statements There is no income tax expense Statement of changes in Equity details the allocation of Profit and Loss ACCY112 Spring 2019 73
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PARTNERSHIP FINANCIAL STATEMENTS ACCY112 Spring 2019 74
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TO BE CONCLUDED Next week topic: Companies • Advantages and disadvantages of companies • Company formation • Types of shares • Accounting for share issues • Financial statements
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