Statement of Financial Position (Edexcel IGCSE Accounting)

Statement of Financial Position for Partnerships

Spec point — IGCSE_ACCOUNTING:S4.166

What is the layout of the statement of financial position of a partnership?

• The statement of financial position of a partnership is the same as that of a sole trader with the exception of the equity section

  • It first states the total assets

    • Non-current assets
    • Current assets

  • And then the total equity and liabilities

    • Equity
    • Non-current liabilities
    • Current liabilities

• The equity section of the statement of financial position shows the balances of each partner from their capital accounts and current accounts separately

• If the current account has a debit balance then:

  • Put brackets around the balance on the statement of financial position
  • Treat the number like a negative number

Layout of a statement of financial position for a partnership

Worked Example Below is the capital and current account of Adi and Bilal at 31 December 2023. Prepare an extract of the statement of financial position at 31 December 2023 showing the equity section.

Adi and Bilal Capital Accounts
		Adi	Bilal			Adi	Bilal
Date	Details	$	$	Date	Details	$	$
				2023 Jan 1	Bal b/d	20 000	12 000

Adi and Bilal Current Accounts
		Adi	Bilal			Adi	Bilal
Date	Details	$	$	Date	Details	$	$
2023 Dec 31	Drawings	3 000	6 000	2023 Jan 1	Balance b/d	5 000	1 000
Dec 31	Interest on drawings	300	600	Dec 31	Interest on capital	1 000	600
				Dec 31	Salaries	2 000
				Dec 31	Share of profit	6 000	4 000

Answer

Balance the current accounts.

Adi and Bilal Current Accounts
		Adi	Bilal			Adi	Bilal
		$	$			$	$
2023 Dec 31	Drawings	3 000	6 000	2023 Jan 1	Balance b/d	5 000	1 000
Dec 31	Interest on drawings	300	600	Dec 31	Interest on capital	1 000	600
Dec 31	Balance c/d	10 700		Dec 31	Salaries	2 000
				Dec 31	Share of profit	6 000	4 000
				Dec 31	Balance c/d		1 000
		14 000	6 600			14 000	6 600
2024 Jan 1	* * Balance b/d		* * 1 000	2024 Jan 1	* * Balance b/d	* * 10 700

Enter the balances into the statement of financial position. Notice that Bilal has a debit balance in his current account, therefore this will be a negative value.

Final answer: Adi and Bilal Final answer: Statement of Financial Position (extract) at 31 December 2023
	Final answer: $**	Final answer: $	Final answer: $
Final answer: Equity	Final answer: Adi	Final answer: Bilal
Final answer: Capital accounts	Final answer: 20 000	Final answer:** 12 000	Final answer: 32 000
Final answer: Current accounts	Final answer: 10 700	Final answer: (1 000)	Final answer: 9 700
Final answer: Total equity			Final answer: 41 700