Ramesh and Suresh were partners in a firm sharing profits in the ratio of theircapitals contributed on commencement of business which were Rs. 80,000 and Rs. 60,000 respectively. The firm started business on April 1, 2016.According to the partnership agreement, interest on capital and drawings are12% and 10% p.a., respectively. Ramesh and Suresh are to get a monthly salaryof Rs. 2,000 and Rs. 3,000, respectively.The profits for year ended March 31, 2017 before making aboveappropriations was Rs. 1,00,300. The drawings of Ramesh and Suresh wereRs. 40,000 and Rs. 50,000, respectively. Interest on drawings amounted toRs. 2,000 for Ramesh and Rs. 2,500 for Suresh. Prepare Profit and LossAppropriation Account and partners’ capital accounts, assuming that theircapitals are fluctuating.
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.
Ramesh and Suresh were partners in a firm sharing profits in the ratio of their
capitals contributed on commencement of business which were Rs. 80,000 and Rs. 60,000 respectively. The firm started business on April 1, 2016.
According to the
12% and 10% p.a., respectively. Ramesh and Suresh are to get a monthly salary
of Rs. 2,000 and Rs. 3,000, respectively.
The profits for year ended March 31, 2017 before making above
appropriations was Rs. 1,00,300. The drawings of Ramesh and Suresh were
Rs. 40,000 and Rs. 50,000, respectively. Interest on drawings amounted to
Rs. 2,000 for Ramesh and Rs. 2,500 for Suresh. Prepare
Appropriation Account and partners’ capital accounts, assuming that their
capitals are fluctuating.
Step by step
Solved in 2 steps with 3 images