Kelly, Kayla and Kathy are partners in Karisma Trading sharing profits or losses in the proportion of 3:1:2 respectively. The partnership agreement states the following: 1. Kelly and Kathy are entitled to a monthly salary of RM2,500 and RM2,000 respectively. 2. Interest in the capital is at 5% per annum. 3. Interest in drawings is at 7% per annum. The following balances were obtained from the partnership books for the financial year ended 31 December 2015. Please prepare the following: c) A fluctuating capital account is credited with the following except: A. Capital contribution of partners B. Profit of the year C. Interest on drawings D. Remuneration to partners
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.
Kelly, Kayla and Kathy are partners in Karisma Trading sharing
respectively. The partnership agreement states the following:
1. Kelly and Kathy are entitled to a monthly salary of RM2,500 and RM2,000 respectively.
2. Interest in the capital is at 5% per annum.
3. Interest in drawings is at 7% per annum.
The following balances were obtained from the partnership books for the financial year ended 31 December 2015.
Please prepare the following:
c) A fluctuating capital account is credited with the following except:
A. Capital contribution of partners
B. Profit of the year
C. Interest on drawings
D. Remuneration to partners
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