hat earnings after interest and salary allowances would be divided in the ratio of 2/3 and 1/3 to Apple and to Green, respectively. Interest of 4% per annum on the beginning capital balances will be allowed. Earnings, salaries, and withdrawals for 200OA and 200B were: Earnings before Interest and Salaries Apple P 11,590 24,600 Salaries paid G
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.
3.11 Apple and Green started a business as a partnership on January 1, 200A. Apple contributed P 36,000 and Green contributed P 30,000. It was agreed that earnings after interest and salary allowances would be divided in the ratio of 2/3 and 1/3 to Apple and to Green, respectively. Interest of 4% per annum on the beginning capital balances will be allowed. Earnings, salaries, and withdrawals for 200OA and 200B were: Earnings before Interest and Salaries Apple P 11,590 24,600 Salaries paid Green Р6,000 6,000 Withdrawals Apple P 6,140 P 4,850 7,152 Green P 4,000 4,000 200A 200B 4,048 REQUIRED: Statement of Partners' Equity for both years.
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