profit and losses in the ratio of 2: 7 respectively. On 1 September 2022, Brown was admitted to the partnership and the profit and loss were to be shared between Kane, Brown and Mutina in the ratio of 4:5:8 respectively. Partnership salaries were K35,000 per quarter of the year for each partner up to 31th August 2022. From 1 September 2022, the partners salaries were K70,000 per annum for each for Kane and Brown and K55,000 per month for Mutinta. The profits and losses for the year ending 31st December was K170,000 loss for the year 2021 and a profit of K400,000 for the year 2022: Required: Show how the Profit will be shared for each year and calculate the tax payable for each partner.
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.
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