Question No:1            Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020  Some of the key extracts of the partnership deed is given as follows: Resolved that. Each partner is to bring in OMR 15,000 as capital Each partner is to get 5% interest on capital Suhail is entitled to get a salary of OMR 400 per month Firm is entitled to charge 6% interest per annum on partner’s drawings. Summary of transactions: November: 2020 Capital contribution: Mr. Suhail –OMR 15000; Mr. Said: OMR 15000 Purchase of goods- OMR 8,000 Sales of goods- OMR 18,000 Wages- OMR 200 Salary to employees- OMR 1,200 Other administrative expenses- OMR 800 Rent of building- OMR 1,000 Electricity charges- OMR 15 Water charges- OMR 5 Travelling expenses- OMR 50 Furniture purchase- OMR 1,500 Electrical fittings- OMR 200 Drawings of partners-: Mr. Suhail –OMR 200; Mr. Said; OMR 150 Salary to Mr. Suhail- OMR 400 December 2020: Salary to employees- OMR 1,200 Rent of building- OMR 1,000 Electricity charges- OMR 12 Water charges- OMR 4 Travelling expenses- OMR 20 Other administrative expenses- OMR 200 Salary to Mr Suhail-OMR 400 Purchase of goods- OMR 10,000 Sales of goods OMR 18,000 Closing stock at the end of the year is valued at OMR 20,000 Required: Trading, profit and loss account for the year ended 31st December 2020 Profit and loss appropriation account for the year ended 31st December 2020 Partner’s Capital account as per fluctuating method and fixed method

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question No:1

           Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020

 Some of the key extracts of the partnership deed is given as follows:

Resolved that.

  1. Each partner is to bring in OMR 15,000 as capital
  2. Each partner is to get 5% interest on capital
  3. Suhail is entitled to get a salary of OMR 400 per month
  4. Firm is entitled to charge 6% interest per annum on partner’s drawings.

Summary of transactions:

November: 2020

  1. Capital contribution: Mr. Suhail –OMR 15000; Mr. Said: OMR 15000
  2. Purchase of goods- OMR 8,000
  3. Sales of goods- OMR 18,000
  4. Wages- OMR 200
  5. Salary to employees- OMR 1,200
  6. Other administrative expenses- OMR 800
  7. Rent of building- OMR 1,000
  8. Electricity charges- OMR 15
  9. Water charges- OMR 5
  10. Travelling expenses- OMR 50
  11. Furniture purchase- OMR 1,500
  12. Electrical fittings- OMR 200
  13. Drawings of partners-: Mr. Suhail –OMR 200; Mr. Said; OMR 150
  14. Salary to Mr. Suhail- OMR 400

December 2020:

  1. Salary to employees- OMR 1,200
  2. Rent of building- OMR 1,000
  3. Electricity charges- OMR 12
  4. Water charges- OMR 4
  5. Travelling expenses- OMR 20
  6. Other administrative expenses- OMR 200
  7. Salary to Mr Suhail-OMR 400
  8. Purchase of goods- OMR 10,000
  9. Sales of goods OMR 18,000

Closing stock at the end of the year is valued at OMR 20,000

Required:

  1. Trading, profit and loss account for the year ended 31st December 2020
  2. Profit and loss appropriation account for the year ended 31st December 2020
  3. Partner’s Capital account as per fluctuating method and fixed method
  4. Balance sheet of the firm as on 31.12.2020

 

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