A,B and C are partners sharing remaining profits equally. For the year ended 2015 the partnership showed a profit of 102, 000. However, it was discovered that the following items were omitted in the firm’s books: Unrecorded at year end 2014 2015 Accrued expense 1, 200 Accrued income 800 Deferred expense 2, 100 Deferred income 1, 000 The partners withdraw their salaries every month. Monthly salary allowances amount P1,000 per month for every partner. The capital balances of the partners at the beginning of the year are 150, 000, 220, 000 and 280, 000, respectively. a.Compute the adjusted profit of 2015. b. Compute the ending capital balance of A.
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.
A,B and C are partners sharing remaining profits equally.
For the year ended 2015 the partnership showed a profit of 102, 000. However, it was discovered that the following items were omitted in the firm’s books:
|
Unrecorded at year end |
2014 |
2015 |
|
Accrued expense |
1, 200 |
|
|
Accrued income |
|
800 |
|
Deferred expense |
2, 100 |
|
|
Deferred income |
1, 000 |
|
The partners withdraw their salaries every month. Monthly salary allowances amount P1,000 per month for every partner. The capital balances of the partners at the beginning of the year are 150, 000, 220, 000 and 280, 000, respectively.
a.Compute the adjusted profit of 2015.
b. Compute the ending capital balance of A.
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