Partnerships

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Merioneth
Merioneth Registered Posts: 21 New contributor 🐸
in AAT Level 3 (Level 6 in Scotland)
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

Comments

  • MOHMEDSALIM PATEL
    MOHMEDSALIM PATEL Registered Posts: 184 Dedicated contributor 🦉
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    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
    King of the Mountains Registered Posts: 66 Regular contributor ⭐
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    I would do the same for number 5 not sure about 6, sorry
  • King of the Mountains
    King of the Mountains Registered Posts: 66 Regular contributor ⭐
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    mohmedalim patel is right
  • Merioneth
    Merioneth Registered Posts: 21 New contributor 🐸
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    Hiya

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

    Thanks

    Liz
  • agatha
    agatha Registered Posts: 41 Regular contributor ⭐
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    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
    numberjunky Registered Posts: 88 Regular contributor ⭐
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    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
    visha Registered Posts: 218 Dedicated contributor 🦉
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    for No 6 Agatha is correct,

    However, I would credit the Purchase a/c as the original enrty was debited there.
  • agatha
    agatha Registered Posts: 41 Regular contributor ⭐
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    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
      Merioneth Registered Posts: 21 New contributor 🐸
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      Thanks

      Thank you is very helpful

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