32) The additional capital paid by a partner to the business of partnership will be:
a.
Debited to partners' capital account
b.
Credited to profit and loss account
c.
Debited to profit and loss appropriation account
d.
Credited to partners' capital account
Transcribed Image Text:Case 2
X, Y and Z were the partners in a partnership firm. The following information were relating to the business at the end of the year 2019:
i.
Capital balance of partners X, Y, Z as on 1st January, 2019 was RO 120000, RO 80000 and RO 60000 respectively.
i.
Current account balance of partners as on 1st January, 2019: X: RO 45500 (Cr),
Y: RO 32600 (Dr)
Z: RO 22100 (Cr)
ii.
Drawings taken by the partners during the year was: X: RO 8800
Y: RO 7500
Z: RO 5400
iv.
Interest on drawings was @ 7% and interest on capital was RO 5%
V.
Partner X entitled to a salary of RO 3200 per year and Partner Y entitled to a salary of RO 150 per month.
vi.
Partner has earned a commission of RO 3800
vii.
Partner Z has paid an additional capital of RO 7000 and partner X has withdrawn the capital of RO 24000
viii.
profit in the ratio of 3:4:3 respectively.
There was a profit of RO 45000 which was transferred from profit and loss appropriation account and partners X, Y, Z shared that
Question:
Prepare partners' capital accounts and the partners' current account. Based on the above information answer the following 3'
questions. (Do not upload any documents in the moodle)
Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.
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