Additional information 1. The net profit according to the Profit and Loss account amounted to R500 000 on 28 February 2021. 2. The partnership agreement made provision for the following: 1. Interest on capital must be provided at 15% per annum on the balances in the capital Accounts from 1 March 2020 to 31 August 2020. With effect from 1 September 2019 the interest rate on capital increases to 18% per annum. 2. The partners are entitled to the following monthly salaries: Bobby R11 000 Vincent R10 000 3. Bobby is entitled to a bonus of 15% of the net profit before any appropriations are made. 4. Bobby and Vincent share the remaining profits or losses in the ratio 3:2 respectively.
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.
Additional information
1. The net profit according to the
February 2021.
2. The partnership agreement made provision for the following:
1. Interest on capital must be provided at 15% per annum on the balances in the capital
Accounts from 1 March 2020 to 31 August 2020. With effect from 1 September 2019 the interest rate on capital increases to 18% per annum.
2. The partners are entitled to the following monthly salaries: Bobby R11 000
Vincent R10 000
3. Bobby is entitled to a bonus of 15% of the net profit before any appropriations are made.
4. Bobby and Vincent share the remaining profits or losses in the ratio 3:2 respectively.
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