THE INSTITUTE OF FINANCE MANAGEMENT

Module Code: AFU 07304

Module Name: Intermediate Financial Accounting
TUTORIAL WORK- PARTNERSHIP

Tutorial work no.1

(a) Describe the laws governing formation and operation of partnership firms in
Tanzania.

(b) In Tanzania, Partnership is mainly governed by the Law of Contract Act

sections 190-226. Using the following, discuss the features of a partnership:
1. Law of contract Act, Cap 345, Section 190 (2) & 191
2. Companies Act 2002, Section 463
3. Business names (registration) Act, cap 213 Section 4 (a)

Tutorial work no.2

The law of contract Act only comes into play if the partners have not agreed upon
beforehand. Hence, if agreed, their rights and obligations will be regulated by the
agreed partnership agreement. In a group of 10 Students formulate a partnership of
ten partners:
1. Establish partnership deed with all relevant contents therein.
2. Identify where your partnership will be registered (if required).

Tutorial work no.3

Discuss rights and duties of a partner (Law of contract Act, Cap 345 Section 192 &
194).

Tutorial work no.4

B and H formed a partnership on January 1, 2016, with capital investments of Tzs.
32m and Tzs. 54m respectively. The profit and loss sharing agreement allowed B a
salary of Tzs. 16m, with the remainder divided equally. During the year, H made
withdrawals of Tzs. 9m; no other investments or withdrawals were made in 2016.
The partnership incurred a loss of TZS. 20m in 2016.
Required:
Give the December 31, 2016, entry to close the Income statement and distribute the
Tzs. 20m loss for 2016.

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Tutorial work no.5
M and J form a partnership and invest Tzs. 50m and Tzs. 30m respectively. During
its first year, the partnership earned a Tzs. 16m net income.
Required:
a) Give the entry to close the income statement and distribute the Tzs. 16m net
profit under each of the following independent assumptions:
1) The partnership agreement is silent on the sharing of profits and losses.
2) Profits and losses are shared in the ratio of beginning capital
investments.
3) Profits and losses are shared by allowing 10% interest on beginning
capital investments, with the remainder divided equally.
b) Assume the partnership had a 24m loss in its first year. Give the entry to close
the Income statement and distribute the Tzs, 24m loss under each of the
foregoing assumptions.

Tutorial work no.6

In January 2017, N, L & G contributed capital amounting 100,000/= cash. In
anticipation of profit, N and L withdraw 20,000/= cash each. G provided a loan
50,000/= cash to the partnership. Interest charged is 10% which is the same as the
rate charged by CRDB. Revenue for the year 2017 was Tzs. 1,600,000/=. N, L and G
partnership purchased goods worth 800,000/= and paid Tzs. 120,000/- and
280,000/- for electricity and rent respectively. Interest on drawings was 5% while
interest on capital was 10%. Salaries allowed to the partners were Tzs. 100,000/- for
N and 150,000/- for G. Partner L is guaranteed a profit of 100,000/- by N and G in
the ratio of 3:5. Ending inventory for the year 2017 was Tzs. 150,000/- Required:
1. Prepare Income statement and the appropriation section of the income
statement.
2. How will you treat interest on loan if the CRDB interest rate was 15%?

Tutorial work no.7

Given the partnership deed of “GUT” between ALLY ALLY and SAID SAID and JOHN
JOHN and JUMAA JUMAA and CHAMSINGI UGWENO (Uploaded in e-learning):
1. Discuss the contents of the partnership deed as per GUT.
2. What other contents would you add into the GUT partnership deed?
3. How would you treat profit/loss sharing if the GUT partnership deed is silent?
What would you do in case of misunderstanding?
4. Given the GUT partnership deed, and any laws governing partnership business
in Tanzania, discuss SIX (6) features of a partnership.
5. What rights and duties are specified in the GUT partnership deed? What other
rights and duties would you add?

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Tutorial work no.8