Q.11 A and B are partners' sharing profits in-proportion of 3. : .2 With Capitals of Rs. 40,000 and Rs. 30,000 respectively': Interest On Capital is. agreed at 5% p; a.. B is to be allowed an annual salary of Rs. 3,000 which, has not : been Withdrawn. During 2007 the profits for the year prior to calculation -f Interest on Capital. But after chargin B's salary amounted to Rs. 12,000. A provision of 5% of this amount is to be made in respect of commission to the manager. Prepare an account showing the allocation of profits.

Q.11 A and B are partners' sharing profits in-proportion of 3. : .2 With Capitals of Rs. 40,000 and Rs. 30,000 respectively': Interest On Capital is. agreed at 5% p; a.. B is to be allowed an annual salary of Rs. 3,000 which, has not : been Withdrawn. During 2007 the profits for the year prior to calculation -f Interest on Capital. But after chargin B's salary amounted to Rs. 12,000. A provision of 5% of this amount is to be made in respect of commission to the manager. Prepare an account showing the allocation of profits.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(Subjective) (Capital & Current Accounts, Profit And Loss Appropriation Account.) Chong and Loh were in partnership trading sharing profits and losses in the ratio 3:2 respectively. They agreed to allow interest on capitals at 5% per annum and to charge interest on drawings at a rate of 10% per annum. Chong was the partnership's manager and for his services he was credited with a salary of RM4,000 per annum. Chong had guaranteed Loh a minimum annual income of RM3,000, after sharing partnership profits and before deducting interest on drawings. During the year ended 30 April 1988, the net profit of the partnership trading was RM 10,000 and the partners' drawings were: Chong RM 500 Loh RM 900 On 31 December 1987 Chong withdrew RM1,200 from his Capital Account and Loh put in a similar amount to his Capital Account. The following were the balances of the partners' accounts at 1 May 1987: Capital Accounts Current Accounts Chong RM6, 000(Cr) RM470(Cr) 5660 Loh RM3, 600(Cr) RM510(Cr) 3396,226…
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A and B are two partners. Theyagreed to allow interest on capital@5% per annum. Capital accountsas 1.4.16 were A 20,000 RS and B15,000 rsA introduced further capital of rs5000 on 1.10.16 and B introduced rs3000 on 1.10.16Calculate interest on Capital of eachPartner as 31.3.17 Please avoid solutions in image thnku
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Direction: Answer the following questions in problem 3: [6,7,8]
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