Question 1 Rara and Riri are in partnership sharing profits and losses 4:2. Under the terms of the partnership agreement, the partners are entitled to interest on capital at 7 per cent per annum and Riri is entitled to a yearly salary of RM7,500. Interest is charged on drawings at 5 per cent per annum and the amounts of interest are given below. No interest is charged or allowed on current accounts. The partners' capitals at 1 July 2021 were: Rara RM40,000 and Riri RM20,000. The net trading profit of the firm, before dealing with partners' interest and Riri's salary for the year ended 30 June 2022 was RM25,900. Interest on drawings for the year amounted to RM400 for Rara and RM370 for Riri.
Question 1 Rara and Riri are in partnership sharing profits and losses 4:2. Under the terms of the partnership agreement, the partners are entitled to interest on capital at 7 per cent per annum and Riri is entitled to a yearly salary of RM7,500. Interest is charged on drawings at 5 per cent per annum and the amounts of interest are given below. No interest is charged or allowed on current accounts. The partners' capitals at 1 July 2021 were: Rara RM40,000 and Riri RM20,000. The net trading profit of the firm, before dealing with partners' interest and Riri's salary for the year ended 30 June 2022 was RM25,900. Interest on drawings for the year amounted to RM400 for Rara and RM370 for Riri.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 1
Rara and Riri are in partnership sharing profits and losses 4:2. Under the terms of the
partnership agreement, the partners are entitled to interest on capital at 7 per cent per
annum and Riri is entitled to a yearly salary of RM7,500. Interest is charged on drawings
at 5 per cent per annum and the amounts of interest are given below. No interest is charged
or allowed on current accounts.
The partners' capitals at 1 July 2021 were: Rara RM40,000 and Riri RM20,000.
The net trading profit of the firm, before dealing with partners' interest and Riri's salary
for the year ended 30 June 2022 was RM25,900. Interest on drawings for the year
amounted to RM400 for Rara and RM370 for Riri.
At 1 July 2020, there was a credit balance of RM1,200 on Riri's current account, while
Rara's current account balance was a debit of RM500. Drawings for the year to 30 June
2022 amounted to RM10,000 for Rara and RM15,000 for Riri.
Required:
Prepare, for the year to 30 June 2022:
(a) The firm's profit and loss appropriation account.
(b) The partners' current accounts.
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