A, B and C are in Partnership sharing profits and losses in the ratio of 2:1:1. During the year ending 31st Dec 2019, the business made a profit of RO 64,000 before providing Interest on capital : A 2,000, B 1500, C 1000 Interest on drawings: A 200, B 150, C 100 Salary to Partners A 500 B 700 C 600 Commission to Partners A 200 B 300 C 400 Prepare a profit and loss appropriation account to show the distribution of profit among the partners.
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.
Homework Activity 1
A, B and C are in
- Interest on capital : A 2,000, B 1500, C 1000
- Interest on drawings: A 200, B 150, C 100
- Salary to Partners A 500 B 700 C 600
- Commission to Partners A 200 B 300 C 400
Prepare a
Step by step
Solved in 2 steps with 1 images
