2-Extracts for preparing/producing financialstatements of Partnership firm:Solar energy equipment partnership firmTrial Balance for the year ending 31 December 2021DrOMRCapital - AdamCapital - BasheerStockMachinery (cost)Machinery (depreciation provision)PurchasesAdministration expensesLandSalesGeneral expensesRentDebtorsCreditorsCommission received.Commission paidFurniture (cost)Furniture (depreciation provision)CashCurrent account - AdamCurrent account - BasheerTotal15,000125,000100,00050,000300,00042,00055,000110,0006,500145,00036,500CrOMR150,000100,00025,000400,00060,0005,00045,000125,00075,000985,000 985,000Adjustments:1. Closing stock is valued at OMR 12,0002. Salaries of the Partner:(a) Adam: OMR 20,000(b) Basheer: OMR 15,0003. Profit should be shared equally between the partners4. Interest allowed on capital is 6% per annum5. The current account opening balance as on 1-1-2021was:(a) Adam: OMR 150,000 less drawings of OMR 25,000(b) Basheer: OMR 100,000 less drawings of OMR25,000

Partnership - A formal agreement between two or more persons who agree to be co-owners, divide up…

2-Extracts for preparing/producing financial statements of Partnership firm: Solar energy equipment partnership firm Trial Balance for the year ending 31 December 2021 Dr OMR Capital - Adam Capital - Basheer Stock 15,000 105.000 Cr OMR 150,000 100,000

2-Extracts for preparing/producing financial statements of Partnership firm: Solar energy equipment partnership firm Trial Balance for the year ending 31 December 2021 Dr OMR Capital - Adam Capital - Basheer Stock 15,000 105.000 Cr OMR 150,000 100,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Question

2-Extracts for preparing/producing financial
statements of Partnership firm:
Solar energy equipment partnership firm
Trial Balance for the year ending 31 December 2021
Dr
OMR
Capital - Adam
Capital - Basheer
Stock
Machinery (cost)
Machinery (depreciation provision)
Purchases
Administration expenses
Land
Sales
General expenses
Rent
Debtors
Creditors
Commission received.
Commission paid
Furniture (cost)
Furniture (depreciation provision)
Cash
Current account - Adam
Current account - Basheer
Total
15,000
125,000
100,000
50,000
300,000
42,000
55,000
110,000
6,500
145,000
36,500
Cr
OMR
150,000
100,000
25,000
400,000
60,000
5,000
45,000
125,000
75,000
985,000 985,000
Adjustments:
1. Closing stock is valued at OMR 12,000
2. Salaries of the Partner:
(a) Adam: OMR 20,000
(b) Basheer: OMR 15,000
3. Profit should be shared equally between the partners
4. Interest allowed on capital is 6% per annum
5. The current account opening balance as on 1-1-2021
was:
(a) Adam: OMR 150,000 less drawings of OMR 25,000
(b) Basheer: OMR 100,000 less drawings of OMR
25,000

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