Statement of financial position Sole Trader (Name) Statement of financial position at 31 December 2020 $000 $000 $000
ASSETS Non-current assets Cost Accumulated Carrying depreciation amount Land and buildings
50
-
50
Fixtures and fittings
49
39
10
Office equipment
36
26
10
Motor vehicles
85
32
53
220
97 123
Current assets Inventory
48
Trade receivables
53
Less allowance for irrecoverable debts
(6)
47
Other receivables
6
Cash in hand
2
103
Total assets 226 EQUITY & LIABILITIES Capital Opening balance
152
Add Profit for the year *
86
238
Less drawings
(62)
Total equity
176
Non-current liabilities Bank loan
20
Current liabilities Trade payables
21
Other payables
6
Bank overdraft
3
30
Total liabilities 50
Total equity and liabilities 226
Note: * If there is a loss for the year, this will be deducted rather than added.
International Accounting Standards
40
(b) Financial statements (final accounts) of a partnership business Statement of profit or loss The statement of profit or loss of a partnership is the same as the statement of profit or loss of a sole
trader. The profit for the year is then appropriated to the partners as follows. Assume that the partners
share profits in the ratio 2:1.
(Partnership Name) Profit and Loss Appropriation Account for the year ended 31 December 2020 $
$
$
Profit for the year
45 000
Add Interest on drawings – Partner A
2 200
Partner B
3 800
6 000
51 000
Less Interest on capital –
Partner A
2 000
Partner B
1 000
3 000
Partner’s salary –
Partner B
18 000
21 000
30 000
Profit shares
Partner A
20 000
Partner B
10 000
30 000
Statement of financial position The first section of the statement of financial position showing assets and second section showing the
liabilities of a partnership is similar to that of a sole trader, the only difference is in the equity shown in
the second section of the statement of financial position compared to a sole trader. The equity is
shown as the capital and current account of each partner. Where the full details of the partners’
current accounts are not required, this section could be presented as follows.
(Partnership Name) Statement of financial position (extract) at 31 December 2020 Partner A Partner B Total Capital accounts 40 000
20 000 60 000
*
Current accounts 28 200
16 800 45 000
Total equity 68 200
36 800 105 000
Note: * Where the balance of a partner’s current account is a debit balance it is shown in brackets and
deducted rather than added.
International Accounting Standards
41
Where full details of the current accounts are required the ‘Financed by’ section of a partnership
statement of financial position could be presented as follows.