Comprehensive Study Guide: Partnership Final Accounts Case Studies

Partnership Case Study 1: Mathew and Michael Final Accounts

• Partnership Overview:     - Partners: Mathew and Michael.     - Profit and Loss Sharing Ratio: Shared equally ($50:50$).     - Reporting Period: Year ended June 30, 2025.

• Trial Balance Data as at June 30, 2025:     - Non-Current Assets:         - Buildings (Cost: $\text{₦}75,000$): Book value listed at $\text{₦}50,000$.         - Fixtures at cost: $\text{₦}11,000$.         - Provision for depreciation (for assets): $\text{₦}3,300$ (Credit).\n - Current Assets:         - Receivables: $\text{₦}16,243$.         - Cash at bank: $\text{₦}677$.         - Inventories (Opening - June 30, 2024): $\text{₦}41,979$.     - Current Liabilities:         - Payables: $\text{₦}11,150$.     - Trading Account Components:         - Turnover (Sales): $\text{₦}123,650$.         - Purchases: $\text{₦}85,416$.         - Carriage outwards: $\text{₦}1,288$.         - Discount allowed: $\text{₦}115$.     - Operating Expenses and Adjustments:         - Loan interest (Paid to Kingsley): $\text{₦}4,000$.         - Office expenses: $\text{₦}2,416$.         - Salaries and wages: $\text{₦}18,917$.         - Bad debt (Written off): $\text{₦}503$.         - Provision for bad debts (Existing): $\text{₦}400$.     - Financing and Capital:         - Loan from Kingsley: $\text{₦}40,000$.         - Capital Accounts:             - Mathew: $\text{₦}35,000$.             - Michael: $\text{₦}29,500$.         - Current Accounts (as at July 1, 2024):             - Mathew: $\text{₦}1,306$ (Debit balance).             - Michael: $\text{₦}298$ (Credit balance).         - Drawings for the year:             - Mathew: $\text{₦}6,400$.             - Michael: $\text{₦}5,650$.     - Trial Balance Totals: Debit = Credit = $\text{₦}244,604$.

• Additional Information and Adjustments:     - Closing Inventory: $\text{₦}56,340$ as at June 30, 2025.     - Accrued Expenses:         - Office expenses: $\text{₦}96$.         - Wages: $\text{₦}200$.     - Depreciation Charges:         - Fixtures: $10\%$ on a reducing balance basis.         - Buildings: $\text{₦}1,000$ flat charge.     - Provision for Bad Debt Adjustment: Reduce the existing provision of $\text{₦}400$ to $\text{₦}320$.     - Partnership Salaries: Mathew is entitled to a salary of $\text{₦}800$ (not yet recorded in the books).     - Interest calculations:         - Interest on Drawings: Mathew $\text{₦}180$; Michael $\text{₦}120$.         - Interest on Capital: $10\%$ per annum on capital account balances.

• Required Financial Statements:     - Statement of profit and loss and appropriation for the year ended June 30, 2025.     - Statement of financial position as at June 30, 2025.

Partnership Case Study 2: Madueke, Williams, and Gideon Final Accounts

• Partnership Overview:     - Partners: Madueke, Williams, and Gideon.     - Profit and Loss Sharing Ratio: $5:3:2$ respectively.     - Reporting Period: Year ended September 30, 2025.

• Trial Balance Data as at September 30, 2025:     - Revenue and Trading Items:         - Turnover (Sales): $\text{₦}210,500$.         - Returns inwards: $\text{₦}6,800$.         - Purchases: $\text{₦}137,190$.         - Carriage inwards: $\text{₦}1,500$.         - Inventories (Opening - Sept 30, 2024): $\text{₦}42,850$.         - Discount allowed: $\text{₦}110$.     - Operating Expenses:         - Salaries and wages: $\text{₦}18,296$.         - Bad debts: $\text{₦}1,234$.         - Provision for bad debts (at Sept 30, 2024): $\text{₦}800$.         - General expenses: $\text{₦}945$.         - Rent and rates: $\text{₦}2,565$.         - Courier expenses: $\text{₦}2,450$.         - Motor expenses: $\text{₦}3,940$.     - Non-Current Assets and Depreciation (at Cost):         - Motor Vehicles: $\text{₦}12,500$.         - Office equipment: $\text{₦}8,400$.         - Accumulated Depreciation (at Sept 30, 2024):             - Motor vehicles: $\text{₦}4,200$.             - Office equipment: $\text{₦}2,700$.     - Current Assets and Liabilities:         - Payables: $\text{₦}24,356$.         - Receivables: $\text{₦}37,178$.         - Cash at bank: $\text{₦}666$.     - Partners' Equity Accounts:         - Capital Accounts:             - Madueke: $\text{₦}30,000$.             - Williams: $\text{₦}16,000$.             - Gideon: $\text{₦}12,000$.         - Current Accounts:             - Madueke: $\text{₦}1,390$ (Debit balance).             - Williams: $\text{₦}153$ (Debit balance).             - Gideon: $\text{₦}2,074$ (Credit balance).         - Drawings:             - Madueke: $\text{₦}12,610$.             - Williams: $\text{₦}8,417$.             - Gideon: $\text{₦}6,216$.     - Trial Balance Totals: Debit = Credit = $\text{₦}304,020$.

• Additional Information and Adjustments (Sept 30, 2025):     - Closing Inventory: Valued at $\text{₦}51,060$.     - Prepayments: Rates paid in advance amount to $\text{₦}410$.     - Provision for Bad Debts: Increase the provision to a new total of $\text{₦}870$.     - Unrecorded Partnership Salaries:         - Williams: $\text{₦}1,200$.         - Gideon: $\text{₦}700$.     - Interest on Drawings:         - Madueke: $\text{₦}170$.         - Williams: $\text{₦}110$.         - Gideon: $\text{₦}120$.     - Interest on Capital: To be calculated at $10\%$ of capital balances.     - Depreciation Charges for the year:         - Motor vehicle: $\text{₦}2,500$.         - Office equipment: $\text{₦}1,680$.

• Required Financial Statements:     - Statement of profit and loss and appropriation for the year ended September 30, 2025.     - Statement of financial position as at September 30, 2025.