5.The trial balance extracted from the books of Maji Meupe on 31st December, 2017 showed debit totals of TZS 491,400 and credit totals of TZS 440,400. The trading profit and loss account drawn up on the basis of this trial balance revealed a gross profit of TZS 143,000 and a net profit of TZS 36,000. A careful re-examination of his books revealed the following errors:
(i) Sales day book was overcast by TZS 10,000.
(ii) Goods costing TZS 8,000 had been taken by Maji Meupe for his personal use. No record was made of this fact.
(iii) Cash discount amounting to TZS 6,000 allowed by a creditor was debited to discount allowed account.
(iv) A payment of TZS 5,000 for carriage on sales was debited to carriage inwards account.
(v) A balance of TZS 1,000 in the personal account of M. Migire, a debtor, was not included in the list of total debtors on the trial balance.
(vi) During the year Maji Meupe sold his private farm for TZS 50,000 and paid in the proceeds to the firm’s bank account. This fact was only recorded in the cash book.
(vii) A new warehouse was built at a total cost of TZS 50,000, including materials costing TZS 35,000 and labour TZS 15,000. Materials used were journalised through purchases book and the wages paid were debited to ordinary wages account.
(viii) No record has been made for goods valued at TZS 14,000 taken by the proprietor, Maji Meupe for his personal use.
(ix) Goods costing TZS 25,000 purchased from Azam had been credited to Azania’s personal account.
6. Essau, Chuwa and Linus are in partnership sharing profits and losses in the ratio of 3:2:1 respectively. The following is a trial balance of the partnership as at 31st December, 2017.
Bad debts provision 1st January, 2017
Provision for Depreciation 1st January, 2017
Land and buildings
Land and building at cost
Motor vehicle at cost
Stock on 1st January, 2017
The following information was also provided:
(i) Stock at 31st December, 2017 TZS 600,000.
(ii) Non-current assets are written off at the following rates: Land and buildings at 5% per annum on cost and Motor vehicle at 20% per annum on cost.
(iii) Rates prepaid at 31st December, 2017 TZS 40,000.
(iv) Bad debts amounting to TZS 10,000 were written off and bad debts provision to be adjusted to 5% of the outstanding debtors at 31st December, 2017
(v) At 31st December, 2017 TZS 35,500 was outstanding in respect of selling expenses.
(vi) According to the partnership agreement:
Linus is to get a salary of TZS 120,000 per annum. Interest of 10% per annum is to be allowed on the partner’s capital accounts. No interest is to be allowed on partner’s current accounts and no interest is to be charged on partners drawings.
Using the information provided, prepare:
(a) Partners Trading, Profit and Loss Appropriation Accounts for the year ending 31st December, 2017
(b) Partners’ Current Accounts for the year ending 31st December, 2017 and bring down the balances at 1st January, 2018.