4.3 The Capital of bah and Rah are as follows: Bah 25, 000 Rah 15,000 They share profits equally. Kuh will buy 1/5 the interest and earnings of Bah for 8,000 and Dah will buy 1/2 the interest and earnings of Rah for 7,000. REQUIRED: a. Entry to record the admission of the new partners. b. What is the interest of each partner in the new partnership? c. What is the new profit and loss sharing ratio?

4.3 The Capital of bah and Rah are as follows: Bah 25, 000 Rah 15,000 They share profits equally. Kuh will buy 1/5 the interest and earnings of Bah for 8,000 and Dah will buy 1/2 the interest and earnings of Rah for 7,000. REQUIRED: a. Entry to record the admission of the new partners. b. What is the interest of each partner in the new partnership? c. What is the new profit and loss sharing ratio?

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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Not what you’re looking for? Continue submitting your question. Submit your question Question i. Kijiko and Sahani is in partnership sharing profits and losses 3:2. ii. Under the terms of the partnership agreement, the partners are entitled to interest on capital at 5% per annum and Sahani is entitled to a salary of Kshs. 4,500. Interest is charged on drawings at 5% per annum depending on when the drawings were withdrawn and the amounts of interest on drawings are given below. No interest is charged or allowed on current accounts. The interests on drawings are: Kijiko kshs. 600 and Sahani Kshs. 750. iii. The partners’ capitals at 1 July 2018 were: Kijiko Kshs. 30,000 and Sahani Kshs. 10,000. iv. The net trading profit of the firm, before dealing with partners’ interest or Sahani salary for the year ended 30 June 2019 was Kshs. 25,800. At 1 July 2018, there was a credit balance of Kshs. 1,280 on Sahani current account, while Kijiko current account balance was a debit of Kshs.…
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