Partnerships

Merioneth

Hi

I've done my course work for reports and returns. Thanks for all your help made things a lot easier.

I'm doing some extra questions for the last unit on partnerships.

Can I check the following.

I need to do a journal for one of the partners the journal entry question is as follows.

5) Jack took goods which had cost the business 170 for his own use during the year.

Is it correct to credit Jack's capital account and debit Stock?

And number 6 is also confusing

6) On the 1st Feb 08 the business ordered and paid for goods costing £350. These were recorded as purchases but were never received as they were lost by the carrier responsible for their delivery. The carrier accepted liability for the loss during March 08 and agreed to pay full compensation in April 08. No entries have been made for this loss and claim.

As the year end is 31 March 08 would I record the loss only?

Thanks

Liz

MOHMEDSALIM PATEL

Try again

Please make sure that capital account is only there to record any extra capital introduced or to remove capital in case of any partner retire.
as he took away goods which should be recorded in partner current account there for journal should be as below

partner current account debit
stock account credit

King of the Mountains

I would do the same for number 5 not sure about 6, sorry

King of the Mountains

mohmedalim patel is right

Merioneth

Hiya

Help am still trying to finish this any ideas on no 6?

Thanks

Liz

agatha

Dr Insurance claim account
Cr Cost of Sales
because the stock was insured it shouldnt be charged to P&L
but i am probably wrong:confused1: :thumbdown:

numberjunky

5.
Whenever we have done this sort of thing in class it is usually
Dr Drawings
Cr Purchases
as it is deemed that the purchases are no longer available to be sold. The stock has not been destroyed so it shouldn't be removed from any stock account.

6.

I would guess that as the purchases were recorded but not received, they need to be eliminated from the accounts which you say you have done.

As another shot in the dark, I assume that as the insurance company have promised to pay, it is an ACCRUAL.

Hope you find something useful here.

visha

for No 6 Agatha is correct,

However, I would credit the Purchase a/c as the original enrty was debited there.

agatha

an extract from passcard:

STOLEN GOODS OR GOODS DESTROYED
The cost of goods stolen/destroyed can be calculated as follows

Cost of goods sold based on gross profit margin or mark up ACost of goods sold calculated using standard formula (ie opening stock+ purchases- closing Stock) (B)
Difference (loss/stolen stock) C
A-B=C

If no goods have been stolen, A and B should be the same therefore C should be NIL

If goods have been stolen, B will be larger than A, because some goods which have been purchased were neither sold nor remaining in stock, ie they have been lost

Stolen or lost stock is accounted for in 2 ways depending on whether the goods were insured

IF INSURED
DEBIT INSURANCE CLAIM (DEBTOR)
CREDIT PURCHASES

IF NOT INSURED
DEBIT EXPENSES
CREDIT PURCHASES

Merioneth

Thanks

Thank you is very helpful