Khalid, Khamis and Majid started a partnership firm on January 1, 2019. They contributed RO. 100,000, RO. 80,000 and RO. 60,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Khalid is to be paid salary of RO. 2,000 p.m. and Khamis is to be paid a commission of RO. 10,000. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Khalid RO. 12,000, Khamis RO. 8,000 and Majid RO. 2,000. Interest on drawings was RO. 540 for Khalid, RO. 360 for Khamis and RO. 180 for Majid. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 71,320. Required: Prepare the necessary journal entries relating to Profit and Loss Appropriation and Partners’ Capital Account.
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Khalid, Khamis and Majid started a partnership firm on January 1, 2019. They contributed RO. 100,000, RO. 80,000 and RO. 60,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Khalid is to be paid salary of RO. 2,000 p.m. and Khamis is to be paid a commission of RO. 10,000. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Khalid RO. 12,000, Khamis RO. 8,000 and Majid RO. 2,000. Interest on drawings was RO. 540 for Khalid, RO. 360 for Khamis and RO. 180 for Majid. The net amount of profit as per the
Required:
Prepare the necessary
Partners’ Capital Account.
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