Anwar and Arif are in partnership. The following figures are extracted from their accounts for the year ended 31s* Dec 2018 Capital Accounts at 1st Jan 2018 RO 50,000 Cr 40,000 Cr Anwar Arif Salary for the year Anwar 420 Cr Arif Drawings for the year Anwar 1,780 Dr 13,000 12,500 Arif Interest on Capital for the year Anwar 2,500 2,000 Arif Share of profits for the year Anwar 9.300 9,300 Arif Notes: a. Partner Arif received commission of RO 540 b. Interest on drawings charged @ 6% You are required to show the partner's capital account under Fluctuating Capital Method for the year ended 31* Dec 2018. Dr Capital Account Cr Anwar Arif Anwar Arif

Anwar and Arif are in partnership. The following figures are extracted from their accounts for the year ended 31s* Dec 2018 Capital Accounts at 1st Jan 2018 RO 50,000 Cr 40,000 Cr Anwar Arif Salary for the year Anwar 420 Cr Arif Drawings for the year Anwar 1,780 Dr 13,000 12,500 Arif Interest on Capital for the year Anwar 2,500 2,000 Arif Share of profits for the year Anwar 9.300 9,300 Arif Notes: a. Partner Arif received commission of RO 540 b. Interest on drawings charged @ 6% You are required to show the partner's capital account under Fluctuating Capital Method for the year ended 31* Dec 2018. Dr Capital Account Cr Anwar Arif Anwar Arif

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

Anwar and Arif are in partnership. The following figures are extracted from their accounts for the
year ended 31s* Dec 2018
Capital Accounts at 1st Jan 2018
RO
50,000 Cr
40,000 Cr
Anwar
Arif
Salary for the year
Anwar
420 Cr
Arif
Drawings for the year
Anwar
1,780 Dr
13,000
12,500
Arif
Interest on Capital for the year
Anwar
2,500
2,000
Arif
Share of profits for the year
Anwar
9.300
9,300
Arif
Notes:
a. Partner Arif received commission of RO 540
b. Interest on drawings charged @ 6%
You are required to show the partner's capital account under Fluctuating Capital Method
for the year ended 31* Dec 2018.

Dr
Capital Account
Cr
Anwar
Arif
Anwar
Arif

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