1. (a) The partnership of Fatimah and Anisa commenced on 1 January 2020 and accounts are prepared to 31 December annually. Their partnership recorded a profit before appropriation of RM60,000. The partnership agreement provided for the following: Interest on capital and drawings 3% per annum for each partner Fatimah's drawings RM4,200 RM1,400 RM14,000 RM7,000 Anisa's drawings Fatimah's capital contribution Anisa's capital contribution Salary: Fatimah Share on divisible income / (loss): Fatimah Anisa RM28,000 2/3 1/3 Required: Prepare a profit and loss appropriation account. (b) How does the tax treatment apply to the partnership?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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