Salim (a) Rashid (b) Total (a+b) Particulars First OR 30,000 Next OR 20,000 Remaining OR 10,000 Total net income 12,000 18,000 30,000 8,000 12,000 20,000 5,000 OR 25,000 5.000 OR 35,000 10,000 OR 60,000
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.
Please I need answer for question No. 2 which is related to question No. 1 which already solved. Thanks
- Salim and Rashid form a partnership, investing OR 80,000 and OR 120,000, respectively.
Required: Determine their shares of net income:
Net income is OR 60,000. The first OR 30,000 is shared on the basis of partner capital balances. The next OR 20,000 is based on partner services, with Salim getting 40% and Rashid 60%. The remainder is shared equally.
Step 1: Calculate the share of net income (OR30,000) based on partners’ capital balance.
Step 2: Calculate the share of net income (OR 20,000) based on the percentage of partners’ service.
Step 3: Calculate the share of net income (OR 10,000=(60,000–30,000–20,000)) based on equal share.
Step 4: Prepare a statement showing the allocation of profit.
2. How can partnership
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