Alevels Edexcel Accounting Partnership Chapterwise Questions

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This Revision Handout includes the Questions and Answers of a total of 6 exercises!
Chapters:
Partnerships - Admission - Unit 1 (Pearson Edexcel)
Page 1 (WAC01 or WAC11) 2019 Winter
Page 3 (WAC01 or WAC11) 2019 Winter - Answer
Page 9 (WAC01 or WAC11) 2018 Summer
Page 11 (WAC01 or WAC11) 2018 Summer - Answer
Page 16 (WAC01 or WAC11) 2017 Autumn
Page 19 (WAC01 or WAC11) 2017 Autumn - Answer
Page 34 (WAC01 or WAC11) 2014 Summer
Page 36 (WAC01 or WAC11) 2014 Summer - Answer
Winter 2019 www.mystudybro.com Accounting Unit 1
Past Paper This resource was created and owned by Pearson Edexcel WAC01 or WAC11
SECTION A
Answer BOTH questions in this section.
1 Rach and Saada are in partnership as accountants sharing profits and losses equally.
On 1 January 2018 the following were the partners’ balances:
£
Capital accounts Rach 25 000
Saada 30 000
Current accounts Rach 2 600 Cr
Saada 4 100 Cr
On 1 January 2018 Rach and Saada admitted Galenia as a partner. Galenia introduced
capital of £15 000 by cheque into the partnership.
The new partnership agreement stated:
• goodwill was valued on 1 January 2018 at £50 000. This would not be retained in
the books
• interest would be paid on the capital balances at the end of each year at the rate
of 10%
• interest would be charged on the total drawings made during the year at the rate
of 4%
• no salaries would be paid to the partners
• profits and losses would be shared by Rach, Saada and Galenia in the ratio 2:2:1
On 31 December 2018, after the first year of trading of the new partnership, the
following balances, excluding capital and current accounts, were in the books.
£
Accountancy fees received 246 400
Non-current assets (at cost)
Leasehold premises 160 000
Motor vehicles 62 000
Fixtures and computers 48 000
Provisions for depreciation
Leasehold premises 86 900
Fixtures and computers 14 000
Motor vehicles running expenses 24 350
Telephone and broadband expenses 6 200
Trade receivables 38 000
Trade payables 17 000
Computer maintenance 17 950
Insurance 30 000
Electricity and water 8 550
Marketing 15 000
Wages and salaries 75 500
6% bank loan (repayable 2022) 40 000
Drawings – Rach 10 000
Saada 7 500
Galenia 7 500
Cash and bank 2 450 Dr
2
P54957A
MSB - Page 1
Additional information at 31 December 2018

(1) Accountancy fee income of £7 000 in November 2018 had not been invoiced,
and no entries had been recorded in the books.
(2) Prepaid marketing £2 100
(3) Accrued expenses: telephone and broadband expenses £300, wages and salaries
£4 600
(4) The 6% bank loan was taken out on 1 April 2018. No interest had been paid on
the loan.
(5) A computer costing £4 000, and with a carrying value of £1 400, was sold for £250
cash on 15 December 2018. No record of the transaction had been recorded in
the books.
(6) Depreciation is charged on all non-current assets owned at the end of the year as
follows:
• the leasehold on the premises is for 20 years. The appropriate amount is to be
written off the leasehold
• motor vehicles at the rate of 20% per annum using the reducing balance
method
• fixtures and computers at the rate of 25% per annum using the straight line
method.
(7) Trade receivables of £3 000 are considered irrecoverable.
(8) An allowance for doubtful debts of 5% is to be created.
Required
(a) Prepare, for the year ended 31 December 2018, the:
(i) capital accounts of the partners
(4)
(ii) Statement of Profit or Loss and Other Comprehensive Income (including the
appropriation section)
(19)
(iii) current accounts of the partners.
(4)
(b) Prepare the Statement of Financial Position at 31 December 2018.
(16)
(c) Evaluate the use of accounting concepts and conventions in the preparation
of the financial statements of a business.
(12)
(Total for Question 1 = 55 marks)
3
P54957A
MSB - Page 2 Turn over
Past Paper (Mark Scheme) This resource was created and owned by Pearson Edexcel WAC01 or WAC11
Question Answer Mark

Number
1 (a)(i) AO1(2), AO2(2)
AO1: Two marks for balances and introducing
capital.
A02: Two marks for goodwill calculation and
posting.
(4)
Capital Account
Date Details Rach Saada Galenia Date Details Rach Saada Galenia
2018 £ £ £ 2018 £ £ £
1 Jan Goodwill 20 000 20 000 10 000 1 Jan Balance 25 000 30 000
All balances 1 AO2 Introduced 15 000
1 AO1
31 Balance 30 000 35 000 5 000 Goodwill 25 000 25 000
Dec
______ ______ ______ 1 AO2 Both__ _____
50 000 55 000 15 000 50 000 55 000 15 000
2019
1 Jan Balance b/d 30 000 35 000 5 000
All balances 1 AO1
MSB - Page 3

Number
1 (a)(ii) AO1 (5), AO2(12), AO3(2)
AO1: Five marks for transferring balances to the
income statement.
A02: Twelve marks for calculating or adjusting
balances in the income statement.
AO3: Two marks for balances requiring two levels of
adjustment.
(19)
Rach, Saada and Galenia

Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2018
£ £ £
Revenue 246 400 + 7 000 253 400(1) AO2
Less
Telephone and broadband expenses 6 200 +300 6 500 (1) AO1
Depreciation –Leasehold premises 8 000 (1) AO2
Motor vehicles 6 000 (1) AO2
Fixtures and computers 11 000 (1) AO2
Loss on sale of computer 1 150 (1) AO3
Motor vehicle running expenses 24 350 (1) AO1
Computer maintenance 17 950 (1) AO1
Insurance 30 000 (1) AO1
Electricity and water 8 550 (1) AO1
Marketing 15 000 - 2 100 12 900 (1) AO2
Wages and salaries 75 500 +4 600 80 100 (1) AO2
Bank loan interest 1 800 (1) AO2
Bad debt 3 000 (1) AO2
Allowance for doubtful debts 2 100 (1) AO3
(213 400)
Profit for the year 40 000
Plus
Interest on drawings- Rach 400 (1) AO2
Saada 300 (1) AO2
Galenia 300
1 000
41 000
Less
Interest on capital Rach 3 000 (1of) AO2 All
Saada 3 500
Galenia 500
MSB - Page 4
(7 000)
34 000
Share of profit Rach 13 600 (1of) AO2 All
Saada 13 600 Correct split
Galenia 6 800
(34 000)

Number
1 (a)(iii) AO1 (4)
AO1: Four marks for posting balances.
(4)
Current Account
Date Details Rach Saada Galenia Date Details Rach Saada Galenia
2018 £ £ £ 2018 £ £ £
31 Dec Drawings 10 000 7 500 7 500 1 Jan Balance 2 600 4 100 -
All balances 1 AO1 31 In’t on 3 000 3 500 500
Dec cap
Dr’gs int 400 300 300 All balances 1 AO1
All balances 1 AO1
Profit 13 600 13 600 6 800
All balances __1 AO1
Balance __8 800 13 400 ______ Balance _____ _____ 500
19 200 21 200 7 800 19 200 21 200 7 800
2019 2019
1 Jan Balance 500 1 Jan Balance 8 800 13 400
b/d
MSB - Page 5

Number
1 (b) AO1 (5), AO2 (9), AO3(2)
AO1: Five marks for transferring balances to the
position statement.
A02: Nine marks for calculating or adjusting
balances in the position statement.
AO3: Two marks for balances requiring two levels of
adjustment.
(16)
Statement of Financial Position at 31 December 2018
Non-current Assets
Cost Accumulated Carrying
depreciation value
£ £ £
Leasehold premise 160 000 94 900 65 100 (1)of AO2
Motor vehicles 62 000 38 000 24 000(1)of AO2
Fixtures and computers 44 000(1) AO2 22 400(1)of AO3 21 600
266 000 155 300 110 700(1)of AO2
Current Assets
Trade receivables 38 000-3 000+7 000 42 000(1)of AO2
Less Allowance for doubtful debts (2 100)
39 900(1) AO3
Other receivables: 2 100(1) AO2
Cash and bank 2 450 + 250 2 700 (1) AO2
44 700
Total Assets 155 400
Capital Accounts
Rach 30 000
Saada 35 000
Gallenia 5 000
70 000 (1)of AO2
Current Accounts
Rach 8 800
Saada 13 400
Gallenia (500)
21 700 (1of) AO2
Non-current Liabilities
6% Bank loan (repayable 2022) 40 000 (1) AO1
MSB - Page 6
Current Liabilities
Trade payables 17 000 (1) AO1
Other payables: (300+4 600+1 800) 6 700
(1) AO1 (1) AO1 (1) AO1 23 700
Total Capital and Liabilities 155 400
Question Indicative Content Mark

Number
1 (c) AO1 (1), AO2 (1), AO3 (5), AO4 (5)
Positive points for concepts and conventions
Enables the financial statements of different businesses

to be prepared using the same approach.
Enables different periods and businesses to be ompared.
Trust on the reliability of the information by
stakeholders.
Negative points for concepts and conventions
Requires professional input to apply the concepts and

conventions.
Concepts and conventions can contradict each other.
Interpretation of concepts and conventions can vary.
Decision
Candidates may conclude concepts and conventions are
critical for accounting or not critical for accounting.
Candidates should support that decision with an
appropriate rationale.
NOTE
Candidates are required to evaluate the use NOT to
describe particular concepts or conventions. No marks
will be awarded for descriptions of concepts and
conventions.
(12)
MSB - Page 7
Level Mark Descriptor
0 A completely incorrect response.
Level 1 1-3 Isolated elements of knowledge and understanding recall

based.
Weak or no relevant application to the scenario set.
Generic assertions may be present.
Level 2 4-6 Elements of knowledge and understanding, which are
applied to the scenario.
Chains of reasoning are present, but may be incomplete
or invalid.
A generic or superficial assessment is present.
Level 3 7-9 Accurate and thorough understanding, supported
throughout by relevant application to the scenario.
Some analytical perspectives are present, with
developed chains of reasoning, showing causes and/or
effects.
An attempt at an assessment is presented, using
financial and non-financial information, in an appropriate
format and communicates reasoned explanations.
Level 4 10 - 12 Accurate and thorough knowledge and understanding,
supported throughout by relevant and effective
application to the scenario.
A coherent and logical chain of reasoning, showing
causes and effects.
Assessment is balanced, wide ranging and well
contextualised using financial and non-financial
information and makes informed recommendations and
decisions.
MSB - Page 8
Summer 2018 www.mystudybro.com Accounting Unit 1
6 Asanka and Bhulo are in partnership sharing profits and losses equally. The following
balances were in the books on 30 April 2017.
Capital accounts: £
Asanka 30 000
Bhulo 25 000
Current accounts:
Asanka 600 Cr
Bhulo 1 500 Dr
Additional information
(1) On 1 May 2017 Asanka and Bhulo agreed to admit Padman as a partner.
An agreement was prepared for the new partnership as follows:
• Padman would introduce capital of £20 000 by cheque.
• Goodwill was valued at £18 000. This would not be retained in the books of
the new partnership.
• Asanka would withdraw £10 000 of his capital. This would be paid by cheque
on 1 May 2017.
• Interest will be charged on drawings taken at 5% per annum.
• Asanka would be paid interest on his remaining capital at 8% per annum.
• No interest on capital would be paid to Bhulo or Padman.
• Salaries for the year would be paid to Bhulo £8 000 and Padman £10 000
• The profit (loss) sharing ratio of Asanka, Bhulo and Padman would be 2:4:3
(2) Balances in the books at 30 April 2018:
• Profit for the year £45 585
• Salaries and drawings:
Partners’ Drawings
salaries accrued taken
£ £
Asanka – 5 800
Bhulo 500 6 500
Padman 1 000 8 000
15
P51624A
Required
(a) State the rules that would apply to the following where there is no partnership
agreement:
• interest on partners’ loans
• partners’ salaries
• share of profit or loss.
(3)
(b) Prepare, for the year ended 30 April 2018, the:
(i) appropriation section of the Statement of Profit or Loss and Other
Comprehensive Income
(7)
(ii) capital accounts of Asanka, Bhulo and Padman
(7)
(iii) current accounts of Asanka, Bhulo and Padman.
(7)
(c) Evaluate the use of a formal partnership agreement.
(6)
TOTAL FOR SECTION B = 90 MARKS

TOTAL FOR PAPER = 200 MARKS
16
P51624A
MSB - Page 10

Some analysis is present, with developed chains of
reasoning, showing causes and/or effects applied to the
scenario, although these may be incomplete or invalid.
An attempt at an evaluation is presented, using financial
and perhaps non-financial information, with a decision.
Level 3 5-6 Accurate and thorough knowledge and understanding.

Application to the scenario is relevant and effective.
causes and effects is present.
Evaluation is balanced and wide ranging, using financial
and perhaps non-financial information and an appropriate
decision is made.

Number
6 (a) AO1 (3)
AO1: Three marks for stating the rule.
Interest on loans – Will be paid at 5% per annum

(1) AO1
Partners salaries – There will be no salaries paid
(1) AO1
Share of profit or loss- Equal shares (1) AO1
(3)
MSB - Page 11

Number
6 (b)(i) AO1 (3), AO2 (4)
AO1: Three marks for recording given
balances.
A02: Four marks for calculating the
balance and correctly recording this in the
account.
Appropriation section of the Statement of Profit or

Loss and Other Comprehensive Income
for the year ended 30 April 2018
£ £
Profit for the year 45 585 (1)AO1
Plus
Interest on drawings
Asanka 290
Bhulo 325 (1)AO2 all
Padman 400
1 015
46 600
Interest on capital:
Asanka 2 000 (1)AO2
Salaries:
Bhulo 8 000 (1)AO1
Padman 10 000 (1)AO1
(20 000)
26 600
Share of profit:
Asanka 5 910 (1of)AO2 If ratio
correct
Bhulo 11 820
Padman 8 870 (1of)AO2
26 600
(7)
MSB - Page 12

Number
6 (b)(ii) AO1 (2), AO2 (2), AO3 (3)
AO1: Two marks for recording the opening
balance and balancing the account.
A02: Two marks for recording the bank
entries correctly.
AO3: Three marks for calculating and
recording the impact of goodwill.
(7)
Capital Accounts
Asanka Bhulo Padman Asanka Bhulo Padman
£ £ £ £ £ £
Goodwill 4 000 8 000(1) 6 000(1) Balance 30 000 25 000(1)
b/d
Bank 10 000(1) Bank 20 000(1)
Balance 25 000 26 000 14 000 Goodwill 9 000(1) 9 000 _____
c/d
39 000 34 000 20 000 39 000 34 000 20 000
Balance 25 000 26 000 14 000
b/d
(1of) All
Balances b/d (1) AO1 x2

Bank entries (1) AO2 x 2
Goodwill adjustment (1) AO3 x3
MSB - Page 13

Number
6 (b)(iii) AO1 (1), AO2 (6)
AO1: One mark for recording the opening
balance and balancing the account.
A02: Six marks for correctly recording the
transfers from appropriation and the
salaries and drawings paid.
(7)
Current Accounts
Asanka Bhulo Padman Asanka Bhulo Padman
£ £ £ £ £ £
Balance 1 500 Balance 600
b/d b/d
Int on 290 325 400
dr’gs (1of)
Salaries 7 500 9 000 Int on 2 000
paid (1) cap (1of)
Drawings 5 800 6 500 8 000 Salaries 8 000 (1) 10 000
(1)
Balance 2 420 3 995 1 470 Share 5 910 11 820 8 870
c/d of pr’t (1of)
8 510 19 820 18 870 8 510 19 820 18 870
Balance 2 420 3 995 1 470
b/d
(1of)
Balances (1) AO1

Appropriation, salary and drawings paid entries (1) AO2 x 6
Marks are for ALL three partners entries correct
MSB - Page 14
Question Indicative Content Mark

Number
6 (c) AO2 (1), AO3 (2), AO4 (3)
Positive points for partnership agreement
Partners are clear about the terms of their

partnership relationship.
This clarity should help to avoid disagreements or
understandings at a later date.
Negative points for partnership agreement
If the agreement is formalised there is the cost and

time of doing this.
No agreement can cater for all eventualities that
the partnership will face.
Decision
Candidates should conclude that a partnership
agreement in some form will be valuable.
Candidates should support that decision with an
appropriate rationale.
NOT (6)
General benefits of a partnership

Level 1 1-2 Isolated elements of knowledge and understanding which
are recall based.
Some analysis is present, with developed chains of
reasoning, showing causes and/or effects applied to the
scenario, although these may be incomplete or invalid.
An attempt at an evaluation is presented, using financial
and perhaps non-financial information, with a decision.
Level 3 5-6 Accurate and thorough knowledge and understanding.
Application to the scenario is relevant and effective.
causes and effects is present.
Evaluation is balanced and wide ranging, using financial
and perhaps non-financial information and an appropriate
decision is made.
MSB - Page 15
Autumn 2017 www.mystudybro.com Accounting Unit 1
SECTION A
Answer BOTH questions in this section.
1 Aaron and Bitan are in partnership, sharing profits and losses equally.
On 31 July 2016, the capital account balances of the partners were:
Aaron £50 000
Bitan £75 000
On 1 August 2016, Aaron and Bitan agreed to admit Chaman as a partner.
A Partnership Agreement was prepared as follows:
• Chaman would bring assets of £35 000 into the partnership.
• Goodwill was valued at £40 000
• Goodwill would not be retained in the books of the new partnership.
• No interest would be paid on capital.
• Interest would be charged on drawings at the rate of 5% on balances at the end
of the year.
• Salaries would be paid to Bitan £15 000 and Chaman £12 000
• Profits and losses would be shared: Aaron two-fifths ( 2/5 ); Bitan two-fifths ( 2/5 )
and Chaman one-fifth ( 1/5 ).
2
P50730A
MSB - Page 16
At the end of the first year of trading, on 31 July 2017, the following balances
excluding the capital accounts remained in the books of the partnership.
£
Current accounts - 1 August 2016
Aaron 1 300 Dr
Bitan 900 Cr
Drawings - Aaron 8 000
Bitan 21 000
Chaman 16 000
Revenue 377 500
Purchases 183 200
Non-current assets (cost):
Land and buildings 100 000
Office equipment 40 000
Provision for depreciation:
Office equipment 10 000
General expenses 31 000
Allowance for doubtful debts 1 500
Inventory 1 August 2016 36 500
Carriage inwards 10 300
Carriage outwards 7 450
Insurance 3 650
Rent 12 000
Rent receivable 1 750
Motor vehicles expenses 9 800
Bank 5 000 Dr
8% bank loan (repayable December 2025) 50 000
Bank loan interest paid 2 000
3
P50730A
Additional information at 31 July 2017

• Inventory £40 000
• Insurance includes the annual motor vehicle renewal of £1 200 paid on
1 February 2017.
• General expenses of £4 000 were prepaid.
• Rent receivable of £750 is outstanding.
• The 8% bank loan was taken out in 2015.
• Drawings included the payment of the partner’s salaries.
• Depreciation is charged at the rate of:
• 2% per annum on the cost of land and buildings
• 20% per annum on motor vehicles using the reducing balance method
• 15% per annum on office equipment using the straight line method.
• The allowance for doubtful debts is to be maintained at 5%.
Required
(a) Prepare, for the year ended 31 July 2017, the:
(i) capital accounts of Aaron, Bitan and Chaman
(5)
(ii) Statement of Profit or Loss and Other Comprehensive Income (including the
appropriation of profit or loss)
(20)
(iii) current accounts of Aaron, Bitan and Chaman.
(6)
(b) Prepare the Statement of Financial Position at 31 July 2017.
(12)
Chaman considered setting up business as a sole trader before agreeing to join the
partnership of Aaron and Bitan.
(c) Evaluate Chaman’s decision to join the partnership of Aaron and Bitan as an
alternative to opening a business as a sole trader.
(12)
4
P50730A
MSB - Page 18

Number
1 (a)(i) AO1 (1), AO2 (1), AO3 (3)
AO1: One mark for posting the correct capital
introduced.
A02: One mark for deriving the correct closing
balances.
AO3: Three marks for correctly calculating and
recording the goodwill adjustment.
(5)
(i)
Capital Accounts
Aaron Bitan Chaman Aaron Bitan Chaman
£ £ £ £ £ £
Goodwill 16 000 16 000 8 000 Balance b/d 50 000 75 000
(1) AO3 (1) AO3
Balance c/d 54 000 79 000 27 000 Assets 35 000
(1) AO1
Goodwill 20 000 20 000
(1)
AO3
70 000 95 000 35 000 70 000 95 000 35 000
Balance b/d 54 000 79 000 27 000

(1)of All 3
AO2
(5)
MSB - Page 19
(ii)
AO1 (6), AO2 (14)
AO1: Six marks for transferring balances from the list of
balances to the financial statements without amendment.
A02: Fourteen marks for adjusting balances from the list of
balances and posting correctly in the financial statements.
Aaron, Bitan and Chaman
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 July 2017
£ £
Revenue 377 500
Less
Opening inventory 36 500
Purchases 183 200
Carriage inwards 10 300 (1) AO1
230 000
Closing inventory (40 000)
Cost of sales 190 000 (1)of + w AO2
Gross profit 187 500
Plus Other income:
Rent receivable (1 750 + 750) 2 500 (1) AO2
190 000
Less
Depreciation – Land and buildings 2 000 (1) AO2
Motor vehicles 11 200 (1) AO2
Office equipment 6 000 (1) AO2
Wages and salaries 56 500 (1) AO1
General expenses (31 000 – 4 000) 27 000 (1) AO2
Allowance for doubtful debts increase 900 (1) AO2
Carriage outwards 7 450 (1) AO1
Insurance (3 650 – 600) 3 050 (1) AO2
Rent 12 000 (1) AO1
Motor vehicle expenses 9 800 (1) AO1
Bank loan interest (2 000 + 2 000) 4 000 (1) AO2
(139 900)
Plus
Interest on drawings - Aaron 400 (1) AO2
Bitan 300 (1) AO2
Chaman 200 (1) AO2
900
51 000
Less
Salaries- Bitan 15 000
Chaman 12 000 (1) AO1
(27 000)
24 000
Share of profit Aaron 9 600 (1)of AO2

Bitan 9 600
Chaman 4 800 (1)of AO2
24 000
(20)
MSB - Page 20
(iii)
AO1 (2), AO2 (4)
AO1: Two marks for transferring balances from the list of
balances to the account without amendment.
A02: Four marks for recording correct calculations from
appropriation.
Current Accounts
Aaron Bitan Chaman Aaron Bitan Chaman
£ £ £ £ £ £
Balance b/d 1 300 Balance 900
b/d
Salaries paid 15 000 12 000 Salaries 15 000 12 000
(1) AO2 Both (1) AO1 Both
Drawings 8 000 6 000 4 000 Share of 9 600 9 600 4 800
(1) profit (1)of AO2 All 3
AO1
Int on 400 300 200 Balance 100
drawing (1)of AO2 All 3 c/d
Balance c/d 4 200 600
9 700 25 500 16 800 9 700 25 500 16 800
Balance b/d 100 Balance 4 200 600

b/d (1) of AO2 All 3
(6)
MSB - Page 21

Number
1 (b) AO1 (4), AO2 (7), AO3 (1)
AO1: Four marks for correctly transferring
balances from the list of balances to the
position statement without amendment.
A02: Seven marks for adjusting balances for the
treatment of the item in the income statement.
AO3: One mark for correctly calculating the
adjusted trade receivables.
Statement of Financial Position at 31 July 2017

Assets
Non-current Assets
Cost Accumulated Carrying
Depreciation Value
£ £ £
Land and buildings 100 000 6 000 94 000 (1)of AO2
Motor vehicles 80 000 35 200 44 800 (1)of AO2
Office equipment 40 000 16 000 24 000 (1)of AO2
220 000 57 200 162 800
Current Assets
Inventory 40 000 (1) AO1
Less Allowance for doubtful debts (2 400)
45 600 (1)of AO3
Other receivables: (4 000 + 750 +600 5 350 (1) AO2
Bank 5 000 (1) AO1
95 950
Total Assets 258 750
Capital and Liabilities

Capital Accounts
Aaron 54 000
Bitan 79 000
Chaman 27 000
160 000 (1)of AO2
Current Accounts
Aaron 100 Dr
Bitan 4 200 Cr
Chaman 600 Cr
4 700 (1)of AO2
8% bank loan (repayable December 2025) 50 000 (1) AO1
Current Liabilities
Trade payables 42 050 (1) AO1
Other payables: 2 000 (1) AO2
44 050
Total Capital and Liabilities 258 750
(12)
MSB - Page 22
Question Indicative Content

Number
1 (c) AO1 (1), AO2 (1), AO3 (5), AO4 (5)
Potential arguments for

Greater resources available to business.
Can specialise to strengths of the partnership.
Cover for holidays and sickness.
Potential arguments against

Must share profits.
Cannot make decisions without referring to other
partners.
Need for mutual trust as joint and several liability.
Decision
Candidates may decide that the decision to join the
partnership was a positive or negative move. Candidate’s
decisions must be supported by a rationale of key points in
arriving at that conclusion.
(12)
Level 1-3 Isolated elements of knowledge and understanding recall
1 based.
Level 4-6 Elements of knowledge and understanding, which are
2 applied to the scenario.
Chains of reasoning are present, but may be incomplete or
invalid.
A generic or superficial assessment is present.
Level 7-9 Accurate and thorough understanding, supported
3 throughout by relevant application to the scenario.
Some analytical perspectives are present, with developed
chains of reasoning, showing causes and/or effects.
An attempt at an assessment is presented, using financial
and non-financial information, in an appropriate format and
communicates reasoned explanations.
Level 10-12 Accurate and thorough knowledge and understanding,
4 supported throughout by relevant and effective application
to the scenario.
A coherent and logical chain of reasoning, showing causes
and effects.
Assessment is balanced, wide ranging and well
contextualised using financial and non-financial information
and makes informed recommendations and decisions.
MSB - Page 23
SOURCE MATERIAL FOR USE WITH QUESTION 6

6 Chok and Tamar are in partnership sharing profits and losses equally. On
30 November 2014 their Statement of Financial Position was as follows:
Chok and Tamar

Statement of Financial Position at 30 November 2014
£ £
Non-current Assets
Premises 60 000
Fixtures and fittings 26 000
86 000
Current Assets
Inventory 28 500
Bank 5 600
66 500
152 500
Capital
Chock 40 000
Tamar 40 000
80 000
Current Liabilities
Bank loan 30 000
152 500
On 1 December 2014 Chok and Tamar admitted Lai as a partner and the following was agreed:
1. The goodwill of Chok and Tamar was valued at £120 000.
2. Tamar would reduce his capital by £20 000, receiving this sum by cheque.
3. Lai would bring the following assets into the new partnership:
£
Delivery vehicle 15 000
Inventory 16 000
Bank 25 000
4. Half of the bank loan would be repaid.
5. Profits and losses would be shared by Chok, Tamar and Lai in the ratio 2:1:1.
6. Goodwill would not be recorded in the books of the new partnership.
10
P45047A
MSB - Page 24
Required:
(a) Prepare the:
(i) Capital Accounts of Chok, Tamar and Lai
(12)
(ii) opening Statement of Financial Position for the new partnership at
1 December 2014.
(16)
(b) Evaluate the introduction of a new partner into the business.
(4)
Answer space for question 6 is on pages 33 to 37 of the question paper.
11
P45047A
6 (a)(i)
Capital Accounts
Chok Tamar Lai Chok Tamar Lai
£ £ £ £ £ £
Bank √ 20 000 √ Balance 40 000 40 000 √
Goodwill 60 000 √ 30 000 √ 30 000 √ Goodwill 60 000 √ 60 000 √
Balance c/d 40 000 50 000 26 000 √ Introduced / 56 000 √√
100 000 100 000 56 000 Assets 100 000 100 000 56 000
Balance b/d 40 000 50 000 26 000 √of
(12)
(ii)
Chok, Tamar and Lai
Statement of Financial Position at 1 December 2014 √ Names + title
£ £
Non-current Assets
Premises 60 000 √
Fixtures and fittings 26 000 √
Delivery vehicle 15 000 √
101 000
Current Assets
Inventory 28 500 + 16 000 44 500 √√
Trade receivables 32 400 √
76 900
177 900
Capital:
Chok 40 000 √of if unadjusted
Tamar 50 000 √of if unadjusted
Lai 26 000 √of if unadjusted
116 000
Current Liabilities
Trade payables 42 500 √
Bank 5 600 √+25 000 √ – 15 000 √-20 000 √ 4 400
Bank loan 15 000 √
177 900
(16)
(b)
Valid answers may include:

In favour
• More capital available
• More skill and knowledge.
Against
• Profits shared between three
• Greater chance of disagreement.
Not: More profit

√√ x 2 points (MAX one point for and one point against) (4)
(Total 32 marks)
SECTION A
1. Anthi and Keri started a partnership on 1 January 2013. On that date the partners placed the
following assets and liabilities into the business:
Anthi
Goodwill £75 000
Delivery vehicle £9 000
Inventory £16 000
Trade receivables £7 000
Trade payables £15 000
Keri
Land and building £80 000
Additional information:
(1) The partnership agreement stated that:

• Goodwill would not be maintained in the books of the partnership
• Interest on capital would be paid at the rate of 5% per annum
• Anthi would receive a salary of £15 000 per annum
• Profits and losses would be shared three fifths Anthi, two fifths Keri
• All appropriations would be recorded in a current account for each partner.
(2) On 1 July 2013, Keri paid an additional £20 000 capital into the business bank account.
(3) The partnership received a £50 000, 8% bank loan on 1 April 2013. The loan is repayable in
five equal annual instalments on the 1 April of each year. The first repayment will be made on
1 April 2014.
(4) Balances, other than partners’ capital and current accounts, at 31 December 2013 were:
£
Inventory 63 000
Land and buildings (at cost) 80 000
Delivery vehicles (at cost) 19 000
Fixtures and fittings (at cost) 14 000
8% Bank loan 50 000
Cash and bank 7 800
Bank loan interest 2 000
Delivery vehicle expenses 12 250
Carriage inwards 500 Cr
Sundry expenses 21 900
Drawings: Anthi 5 500
Keri 6 000
P43182A 2
MSB - Page 28
(5) At 31 December 2013:

• Wages and salaries includes the £15 000 salary paid to Anthi
• Delivery vehicle expenses of £650 were prepaid
• No depreciation is to be charged on land and buildings
• An additional delivery vehicle was purchased on 1 July 2013. Depreciation is to be
charged at the rate of 20% per annum using the reducing balance method. Depreciation is
charged pro rata to the months of ownership in the year of purchase.
• Fixtures are to be depreciated at the rate of 10% per annum using the straight-line method.
The fixtures and fittings were purchased on 1 January 2013 and the residual value will be
£2 000
• A bad debt of £800 was to be written off as irrecoverable. A provision for doubtful debts
is to be created at 4% of remaining debts.
Required:
(a) Prepare the Journal at 1 January 2013, including narratives, to:
(i) open the books of the partnership

(3)
(ii) remove goodwill from the books of the partnership.

(3)
(b) Prepare for the year ended 31 December 2013, the:
(i) Statement of Comprehensive Income and Appropriation Account

(15)
(ii) Capital accounts of the partners

(4)
(iii) Current accounts of the partners.

(4)
(c) Prepare the Statement of Financial Position at 31 December 2013.

(15)
(d) Evaluate the decision of the partners to not charge depreciation for land and buildings.
(8)
(Total 52 marks)
P43182A 3 Turn over

MSB - Page 29
SECTION A
1(a)(ii)
Journal
Dr CR
£ £
Goodwill 75 000
Delivery vehicle 9 000
Inventory 16 000
Capital Anthi 92 000 √
Capital Keri 80 000 √
Opening assets and liabilities of the partnership √
(3)
Capital Anthi 45 000 √
Capital Keri 30 000 √
Goodwill 75 000
Goodwill of the partnership written off √
(3)
(b)(i)
Anthi and Keri – Statement of Comprehensive Income and Appropriation Account for the
year ended 31 December 2013
£ £
Less expenses:
Wages and salaries (47 000 – 15 000) 32 000 √
Loan interest (2 000 + 1 000) 3 000 √
Delivery vehicle expenses (12 250 – 650) 11 600 √
Sundry expenses 21 900 √
Depreciation – Delivery vehicles 2 800 √
Fixtures and fittings 1 200 √
Bad debts 800 √
Provision for Doubtful Debts 700 √
74 000
MSB - Page 30
Anthi 2 350 √√( √of)
Keri (2 500 + 500) 3 000 √√ (√of)
5 350
Salary Anthi 15 000 √
Share of profit:
Anthi 5 400 √of if in correct ratio
Keri 3 600 √of if in correct ratio
9 000
29 350
(15)
(ii)
Capital Accounts
Anthi Keri Anthi Keri
£ £ £ £
Goodwill 45 000 30 000 √ Journal 92 000 80 000 √
Balance c/d 47 000 70 000 Bank 20 000 √
92 000 100 000 92 000 100 000
Balance b/d 47 000 70 000 √of
(4)
(iii)
Current Accounts
Anthi Keri Anthi Keri
£ £ £ £
Salary paid 15 000 √ - Interest 2 350 3 000 √ of
Drawings 5 500 6 000 √ Salary 15 000 -
Balance c/d 2 250 600 Share of profit 5 400 3 600
22 750 6 600 22 750 6 600
Balance b/d 2 250 600 √of
(4)
MSB - Page 31
(c)
Statement of Financial Position at 31 December 2013
Cost Accumulated Carry

Depreciation over
£ £ £
Non-current assets
Delivery vehicles 19 000 2 800 16 200 √of if <19 000
Fixtures and fittings 14 000 1 200 12 800 √of if <14 000
109 000 √
Current assets
Inventory 63 000 √
Trade receivables 17 500 √
Less PDD 700 16 800 √of
Other receivables 650 √
Cash and Bank 7 800 √
88 250
197 250
Capital and equity:
Capital accounts:
Anthi 47 000
Keri 70 000
117 000 √of
Current accounts:
Anthi 2 250
Keri 600
2 850 √of
119 850
Creditors: due in less than one year
8% Bank loan repayment 10 000 √
Other payables (1 000 + 500) 1 500 √√
37 400
Creditors: due in more than one year
8% Bank loan 40 000 √ (√of £50,000)
40 000
197 250
(15)
MSB - Page 32
(d) ) Valid points may include:

Positive
• Land generally does not decrease in value through deterioration
• Historically land and buildings have appreciated in value
• Annual depreciation charge would be very small due to the long life of the
asset
Negative
• Buildings will deteriorate with the passage of time
• Does not comply with concept of prudence, matching or going concern
• Unrealistic not to charge
• Non current assets not overstated
Do not accept higher profit, save time, make it easier
√√ per point x 4 - MAX 2 points positive and 2 points negative

(8)
(Total 52 marks)
2 (a) £ £ £
Plus Minus Balance
Inventory count 15 600
(1) 900 √√
(2) (750) √√
(3) (500) √√
(4) 800 √√
(5) 350 √√
2 050 1 250
Adjusted inventory balance 16 400
(10)
MSB - Page 33
SECTION B
4. Hasibul and Iffath are in partnership. The following balances were extracted from their books at
31 March 2014.
£
Capital:
Hasibul 50 000
Iffath 80 000
Current accounts:
Hasibul 500 Dr
Iffath 6 500 Cr
Drawings:
Hasibul 25 000
Iffath 16 000
Non-current assets (at cost) 120 000
Provision for depreciation of non-current assets 20 000
8% Bank loan 15 000
Cash and bank 10 000 Dr
Inventory 31 500
Additional information:
The Partnership Agreement of Hasibul and Iffath stated that:
1. profits and losses are shared in the ratio 2:1

2. interest is allowed on capital at the rate of 5% per annum
3. salaries are paid as follows: Hasibul £7 000 Iffath £5 000
P43179RA 8
MSB - Page 34
Required:
(a) Prepare the:
(i) Appropriation Account for the year ended 31 March 2014

(5)
(ii) Current Accounts of Hasibul and Iffath.

(6)
On 1 April 2014 Hasibul and Iffath admitted Jila as a partner. The following was agreed:
1. Profits and losses would be shared in the ratio 2:2:1

2. The goodwill of Hasibul and Iffath was valued at £120 000 on 31 March 2014. It was agreed
that goodwill would NOT remain in the books of the new partnership
3. Non-current assets costing £30 000 were sold for their carry over (net book) value of
£21 000. Payment to the partnership was half by cheque and half on credit
4. Jila would bring capital of £40 000 into the new partnership; £20 000 in cash and £20 000 in
inventory
5. The 8% Bank loan was repaid
Required:
(b) Prepare the Goodwill Account at 1 April 2014.

(5)
(c) Prepare the Statement of Financial Position for the new partnership at 1 April 2014.
(12)
Jila had been trading as a sole trader before joining the partnership.
(d) Evaluate Jila trading in a partnership compared with being a sole trader.
(4)
(Total 32 marks)
P43179RA 9 Turn over

MSB - Page 35
SECTION B
4 (a)(i)
Hasibul and Iffath
Appropriation Account for the year ended 31 March 2014
£ £

Less
Hasibul 2 500 √
Iffath 4 000 √
6 500
Salaries:
Hasibul 7 000
Iffath 5 000 √ both
12 000
Share of profit:
Hasibul 14 000 √ of if in correct ratio and no aliens
Iffath 7 000 √ of
21 000
39 500
(5)
(ii)
Current accounts
Hasibul Iffath Hasibul Iffath
£ £ £ £
Balance b/d 500 Balance b/d 6 500 √
Drawings 25 000 16 000 √ Int on cap 2 500 4 000 √of
Salaries 7 000 5 000 √
Share of pro’t 14 000 7 000 √of
Balance c/d 6 500 Balance c/d 2 000
25 500 22 500 25 500 22 500
Balance b/d 2 000 Balance b/d 6 500 √of
(6)
(b)
Goodwill Account
£ £
Capita – Hasibul 80 000 √ Capital- Hassibul 48 000 √
Iffath 40 000 √ Iffath 48 000 √
Jila 24 000 √
120 000 120 000
(5)
MSB - Page 36
(c)
Hasibul , Iffath and Jila

Statement of Financial Position at 1 April 2014
Cost Aggregate Carry
depreciation over
£ £ £
Non-current assets 90 000 √ 11 000 √ 79 000
Current assets
Inventory 31 500 √ + 20 000 √ 51 500
Trade receivables 27 000 √ + 10 500 √ 37 500
Cash and bank 10 000 – 15 000 √
+ 10 500 √ + 20 000 √ 25 500 (20 500√, 30 000√, 5 000Cr√
40 500√√, 5 500√√, 15 000√√)
114 500
193 500
Equity and capital: £ £
Capital accounts:
Hasibul 50 000 +80 000 - 48 000 82 000 √of if not 50 000
Iffath 80 000 + 40 000 - 48 000 72 000
Jila 40 000 – 24 000 16 000
170 000
Current accounts:
Hasibul (2 000) √of
Iffath 6 500
Jila -
4 500
Current liabilities
193 500
(12)
d) Valid points from Jila’s point of view may include:
Positive
• Greater capital/resources available
• Specialist skills available from the other partners
• Share losses/reduce risks
Negative
• Shared, not sole, decision making/conflicts
• Joint and several liability
• Share profits
√√ per point x 2 – MAX 1 points positive and 1 points negative
(4)
(Total 32 marks)
MSB - Page 37

Alevels Edexcel Accounting Partnership Chapterwise Questions

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Additional information at 31 December 2018

(Total for Question 1 = 55 marks)

Question Answer Mark

Question Answer Mark

Rach, Saada and Galenia

Question Answer Mark

Question Answer Mark

Statement of Financial Position at 31 December 2018

Question Indicative Content Mark

Positive points for concepts and conventions

Enables the financial statements of different businesses

Negative points for concepts and conventions

Requires professional input to apply the concepts and

Level Mark Descriptor

0 A completely incorrect response.

Level 1 1-3 Isolated elements of knowledge and understanding recall

Bhulo 500 6 500

Padman 1 000 8 000

(Total for Question 6 = 30 marks)

TOTAL FOR SECTION B = 90 MARKS

Level 2 3-4 Elements of knowledge and understanding, which are

Level 3 5-6 Accurate and thorough knowledge and understanding.

Question Answer Mark

Interest on loans – Will be paid at 5% per annum

Question Answer Mark

Appropriation section of the Statement of Profit or

Profit for the year 45 585 (1)AO1

Question Answer Mark

Balances b/d (1) AO1 x2

Question Answer Mark

Balances (1) AO1

Question Indicative Content Mark

Positive points for partnership agreement

Partners are clear about the terms of their

Negative points for partnership agreement

If the agreement is formalised there is the cost and

0 A completely incorrect response.

Additional information at 31 July 2017

(Total for Question 1 = 55 marks)

Question Answer Mark

Balance b/d 54 000 79 000 27 000

Share of profit Aaron 9 600 (1)of AO2

Balance b/d 100 Balance 4 200 600

Question Answer Mark

Statement of Financial Position at 31 July 2017

Capital and Liabilities

Question Indicative Content

Potential arguments for

Potential arguments against

SOURCE MATERIAL FOR USE WITH QUESTION 6

Chok and Tamar

(Total for Question 6 = 32 marks)

Answer space for question 6 is on pages 33 to 37 of the question paper.

Valid answers may include:

Not: More profit

SOURCE MATERIAL FOR USE WITH QUESTION 1

(1) The partnership agreement stated that:

(5) At 31 December 2013:

(a) Prepare the Journal at 1 January 2013, including narratives, to:

(i) open the books of the partnership

(ii) remove goodwill from the books of the partnership.

(b) Prepare for the year ended 31 December 2013, the: