ACCE 212

Study Unit 3 PARTNERSHIP

Accounting concepts & Ledger accounts
 CAPITAL ACCOUNTS
(Accounting for All p.453)

Partners contribute:
a. cash
b. assets – vehicles,
equipment, land
and buildings, etc.
Example 1:
Partner P. Peter contributed
R150 000 cash and
Equipment to the value of
R250 000 as part of his
capital contribution.
 DRAWINGS ACCOUNTS
(Accounting for All p.454)

EACH PARTNER HAS HIS/HER

OWN DRAWINGS ACCOUNT:
2.1 All monies received by the
partner for salaries, bonus
payments, profit share will be
debited to his/her drawings
Example 2.1:
Paid R15 000 for the monthly salary
of Partner P. Peter, according to the
partnership agreement, via EFT.
 DRAWINGS ACCOUNTS
(Accounting for All p.454)
EACH PARTNER HAS HIS/HER
OWN DRAWINGS ACCOUNT:

2.2 Partner withdrew cash or inventory

/ inventory / stationery, etc.

Example 2.2:
Partner P. Peter withdrew the following
for his personal use:
Cash, R2 250
Trading stock at cost price, R5 000
 CURRENT ACCOUNTS
(Accounting for All p.454 - 455)
•
EACH PARTNER HAS HIS/HER OWN CURRENT
ACCOUNT:
REMEMBER AMOUNTS WILL BE FOR
12 MONTHS (FINANCIAL YEAR)
3.1 BONUSES TO PARTNERS (ACCORDING TO
Partnership agreement)
Example 3.1:
According to the partnership agreement
P. Peter will receive an annual bonus of
R40 000 at the end of the financial year.
 CURRENT ACCOUNTS
(Accounting for All p.454 - 455)
EACH PARTNER HAS HIS/HER OWN
CURRENT ACCOUNT:
3.2 Interest on the capital balance of a
partner

Example 3.2:
According to the partnership agreement
partners will receive 10% p.a interest on
their capital balance at the end of the
financial year on 30 June 2020. Interest for
the year still needs to be brought into
account. S Straw withdrew R100 000
capital on 1 December 2019 and P. Peter
increased his capital contribution by
R150 000 on 1 January 2020.
 CURRENT ACCOUNTS
(Accounting for All p.454 - 455)
EACH PARTNER HAS HIS/HER OWN
CURRENT ACCOUNT:
3.3 Interest charged on drawings (DATES
ARE IMPORTANT HERE!).
Example 3.3:
Interest on drawings is to be charged at 12%
p.a. and brought into account at the end of the
financial year on 30 June 2020. Partner S.
Straw withdrew cash for his personal use on
1 January 2020, R5 000 and trading stock
with a cost price of R15 000 on 1 March 2020.
 CURRENT ACCOUNTS
(Accounting for All p.454 - 455)
EACH PARTNER HAS HIS/HER OWN
CURRENT ACCOUNT:
REMEMBER AMOUNTS WILL BE FOR
12 MONTHS (FINANCIAL YEAR)

3.4 Interest on current account balances

Dt balance: negative balance and the interest
on current account will be owed by the partner
Ct balance – positive balance and the interest
on current account will be received by the
partner on his positive balance

Example 3.4:
Interest on current account balances is to be
charged at 8% p.a. and brought into account
at the end of the financial year on 30 June
2020.