Q.No.5 Mr. A and Mr. B start a business on 01st June ,2021, with capital of 2,570,000 and 800,000. According to agreement Mr. A is entitled for a salary of 250,000 whereas another partner is entitled for Rs. 46,000. Partners borrowed some amount of loan from a financial institution of Rs. 300,000 at 12% interest rate. The interest on capital 7.5% p.a is allowed to partner B. During their first fiscal year of partnership, they earned a net profit of Rs. 1,650,000. Required: Profit and Loss appropriation account to allocate the profit with 3:2 to partners A and B respectively. Provide necessary journal entries. Moreover, also prepare a capital account for the partnership.

Q.No.5 Mr. A and Mr. B start a business on 01st June ,2021, with capital of 2,570,000 and 800,000. According to agreement Mr. A is entitled for a salary of 250,000 whereas another partner is entitled for Rs. 46,000. Partners borrowed some amount of loan from a financial institution of Rs. 300,000 at 12% interest rate. The interest on capital 7.5% p.a is allowed to partner B. During their first fiscal year of partnership, they earned a net profit of Rs. 1,650,000. Required: Profit and Loss appropriation account to allocate the profit with 3:2 to partners A and B respectively. Provide necessary journal entries. Moreover, also prepare a capital account for the partnership.

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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PART B Laila, Hakim and Amirul are in partnership sharing profits in the ratio 3:2:1. The partnership agreement includes the following information: Interest on capital is at 12% per annum. Salary Amirul is RM8,000 per annum. Interest on drawing is at 6% per annum The interest on loan is 6% per annum a. b. C. d. Additional information: i. Net profit for the year ended 31 December 2021 was RM26,530. i. Capital balances as at 31 December 2021 were: Laila Hakim RM22,000 RM10,000 RM 8,000 Amirul Current account balances as at 31 December 2021: RM5,500 RM (2,700) RM3,800 Laila Hakim Amirul iv. Drawings by partners during the year were: RM8,000 RM6,000 RM9,000 Laila Hakim Amirul v. Loan from Laila RM8,000.
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The following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? OA. R12 000 DR. B. R116 00O DR OC. R52 000 CR D. R12 000 CR S Type here to search
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Terms of the partnership agreement: 1.1 The partners are entitled to a salary of R18 000 each per month. 1.2 Zozi and Sethu share profits in the ratio of 1:1 respectively. 2. Year-end adjustments: 2.1 An outstanding debt of R2 200 is irrecoverable and must be written off. The allowance for credit losses must be increased to R6 500. 2.2 An amount of R4 500 owed by a debtor was written off as irrecoverable during the year ended 29 February 20.1. The debtor has settled the amount previously written off in full on 25 February 20.2. This transaction is still to be recorded in the books of the business. 2.3 Depreciation for the year must still be provided as follows: Office equipment: 20% according to diminishing balance method. Vehicles: 15% according to straight-line method and have a R15 000 residual value. 2.4 Inventories on hand on 28 February 20.1: Merchandise R45 100 2.5 Only 65% of salaries were paid to partners during…
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