Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020 Some of the key extracts of the partnership deed is given as follows: Resolved that. a. Each partner is to bring in OMR 15,000 as capital b. Each partner is to get 5% interest on capital c. Mr. Suhail is entitled to get a salary of OMR 400 per month d. Firm is entitled to charge 6% interest per annum on partner's drawings. Summary of transactions: November: 2020 Capital contribution: Mr. Suhail -OMR 15000; Mr. Said: OMR a. 15000 b. Purchase of goods- OMR 8.000 sales of goods- OMR 18,000 d. Wages- OMR 200 e. Salary to employees- OMR 1,200 f. Other administrative expenses- OMR 800 g. Rent of building- OMR 1,000 h. Electricity charges- OMR 15 i. Water charges- OMR 5 j. Travelling expenses- OMR 50 k. Furniture purchase- OMR 1,500 1. Electrical fittings- OMR 200 m. Drawings of partners-: Mr. Suhail -OMR 200; Mr. Said; OMR 150 n. Salary to Mr. Suhail- OMR 400 December 2020: a. Salary to employees- OMR 1,200 b. Rent of building- OMR 1,000 c. Electricity charges- OMR 12 d. Water charges- OMR 4 e. Travelling expenses- OMR 20 f. Other administrative expenses- OMR 200 g. Salary to Mr Suhail-OMR 400 h. Purchase of goods- OMR 10,000 i. Sales of goods OMR 18,000 Closing stock at the end of the year is valued at OMR 20,000 Required: a. Trading, profit and loss account for the year ended 31" December 2020 b. Profit and loss appropriation account for the year ended 31* December 2020 c. Partner's Capital account as per fluctuating method and fixed method d. Balance sheet of the firm as on 31.12.2020
Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020 Some of the key extracts of the partnership deed is given as follows: Resolved that. a. Each partner is to bring in OMR 15,000 as capital b. Each partner is to get 5% interest on capital c. Mr. Suhail is entitled to get a salary of OMR 400 per month d. Firm is entitled to charge 6% interest per annum on partner's drawings. Summary of transactions: November: 2020 Capital contribution: Mr. Suhail -OMR 15000; Mr. Said: OMR a. 15000 b. Purchase of goods- OMR 8.000 sales of goods- OMR 18,000 d. Wages- OMR 200 e. Salary to employees- OMR 1,200 f. Other administrative expenses- OMR 800 g. Rent of building- OMR 1,000 h. Electricity charges- OMR 15 i. Water charges- OMR 5 j. Travelling expenses- OMR 50 k. Furniture purchase- OMR 1,500 1. Electrical fittings- OMR 200 m. Drawings of partners-: Mr. Suhail -OMR 200; Mr. Said; OMR 150 n. Salary to Mr. Suhail- OMR 400 December 2020: a. Salary to employees- OMR 1,200 b. Rent of building- OMR 1,000 c. Electricity charges- OMR 12 d. Water charges- OMR 4 e. Travelling expenses- OMR 20 f. Other administrative expenses- OMR 200 g. Salary to Mr Suhail-OMR 400 h. Purchase of goods- OMR 10,000 i. Sales of goods OMR 18,000 Closing stock at the end of the year is valued at OMR 20,000 Required: a. Trading, profit and loss account for the year ended 31" December 2020 b. Profit and loss appropriation account for the year ended 31* December 2020 c. Partner's Capital account as per fluctuating method and fixed method d. Balance sheet of the firm as on 31.12.2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
:1 Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020 Some of the key extracts of the partnership deed is given as follows: Resolved that. a. Each partner is to bring in OMR 15,000 as capital b. Each partner is to get 5% interest on capital c. Mr. Suhail is entitled to get a salary of OMR 400 per month d. Firm is entitled to charge 6% interest per annum on partner's drawings. Summary of transactions: November: 2020 Capital contribution: Mr. Suhail -OMR 15000; Mr. Said: OMR a. 15000 b. Purchase of goods- OMR 8.000 sales of goods- OMR 18,000 d. Wages- OMR 200 e. Salary to employees- OMR 1,200 f. Other administrative expenses- OMR 800 g. Rent of building- OMR 1,000 h. Electricity charges- OMR 15 i. Water charges- OMR 5 j. Travelling expenses- OMR 50 k. Furniture purchase- OMR 1,500 1. Electrical fittings- OMR 200 m. Drawings of partners-: Mr. Suhail -OMR 200; Mr. Said; OMR 150 n. Salary to Mr. Suhail- OMR 400 December 2020: a. Salary to employees- OMR 1,200 b. Rent of building- OMR 1,000 c. Electricity charges- OMR 12 d. Water charges- OMR 4 e. Travelling expenses- OMR 20 f. Other administrative expenses- OMR 200 g. Salary to Mr Suhail-OMR 400 h. Purchase of goods- OMR 10,000 i. Sales of goods OMR 18,000 Closing stock at the end of the year is valued at OMR 20,000 Required: a. Trading, profit and loss account for the year ended 31" December 2020 b. Profit and loss appropriation account for the year ended 31* December 2020 c. Partner's Capital account as per fluctuating method and fixed method d. Balance sheet of the firm as on 31.12.2020
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