The partnership agreement of Madi-Maxi Traders provided for the following: Balances on 1 March 20.19: Capital: Madi R 125 000 Maxi R 85 000 Current Account: Madi R 24 000 Maxi R 8 000 (debit) Net profit for the period: R 366 000 Transactions during the year, not included in profit: 1. Madi will be full-time employed and will receive a monthly salary of R 12 000. 2. Interest on drawings to be charged at 15% per annum. 3. Interest on capital will be paid at 12% per annum. 4. Interest on current accounts will be charged at 7% per annum. 5. The partners will share profits in the ratio of capital contributed. 6. On 1 July 20.18, Madi withdrew R 10 000 in cash. On 1 December 20.18, Madi withdrew goods at a cost of R 5 000, this was drawings against expected profits. 7. Madi drew R 6 000 of his salary at the end of each month. REQUIRED: Record the journal entries for Madi-Maxi Traders for the year ended 29 February 20.20.
The partnership agreement of Madi-Maxi Traders provided for the following: Balances on 1 March 20.19: Capital: Madi R 125 000 Maxi R 85 000 Current Account: Madi R 24 000 Maxi R 8 000 (debit) Net profit for the period: R 366 000 Transactions during the year, not included in profit: 1. Madi will be full-time employed and will receive a monthly salary of R 12 000. 2. Interest on drawings to be charged at 15% per annum. 3. Interest on capital will be paid at 12% per annum. 4. Interest on current accounts will be charged at 7% per annum. 5. The partners will share profits in the ratio of capital contributed. 6. On 1 July 20.18, Madi withdrew R 10 000 in cash. On 1 December 20.18, Madi withdrew goods at a cost of R 5 000, this was drawings against expected profits. 7. Madi drew R 6 000 of his salary at the end of each month. REQUIRED: Record the journal entries for Madi-Maxi Traders for the year ended 29 February 20.20.
The partnership agreement of Madi-Maxi Traders provided for the following: Balances on 1 March 20.19: Capital: Madi R 125 000 Maxi R 85 000 Current Account: Madi R 24 000 Maxi R 8 000 (debit) Net profit for the period: R 366 000 Transactions during the year, not included in profit: 1. Madi will be full-time employed and will receive a monthly salary of R 12 000. 2. Interest on drawings to be charged at 15% per annum. 3. Interest on capital will be paid at 12% per annum. 4. Interest on current accounts will be charged at 7% per annum. 5. The partners will share profits in the ratio of capital contributed. 6. On 1 July 20.18, Madi withdrew R 10 000 in cash. On 1 December 20.18, Madi withdrew goods at a cost of R 5 000, this was drawings against expected profits. 7. Madi drew R 6 000 of his salary at the end of each month. REQUIRED: Record the journal entries for Madi-Maxi Traders for the year ended 29 February 20.20.
The partnership agreement of Madi-Maxi Traders provided for the following: Balances on 1 March 20.19: Capital: Madi R 125 000 Maxi R 85 000 Current Account: Madi R 24 000 Maxi R 8 000 (debit) Net profit for the period: R 366 000 Transactions during the year, not included in profit: 1. Madi will be full-time employed and will receive a monthly salary of R 12 000. 2. Interest on drawings to be charged at 15% per annum. 3. Interest on capital will be paid at 12% per annum. 4. Interest on current accounts will be charged at 7% per annum. 5. The partners will share profits in the ratio of capital contributed. 6. On 1 July 20.18, Madi withdrew R 10 000 in cash. On 1 December 20.18, Madi withdrew goods at a cost of R 5 000, this was drawings against expected profits. 7. Madi drew R 6 000 of his salary at the end of each month. REQUIRED: Record the journal entries for Madi-Maxi Traders for the year ended 29 February 20.20.
Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.
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