Thomas and Anna are in a partnership sharing profits and losses equally. The partnership agreement states that interest on drawings is to be charged at a rate of 10% and interest on capital credited at the rate of 6%. The following information is available about the partners' transactions. The partnership has a year end of 31 December 20X1. Thomas Drawings 30/04/X1 30/06/X1 30/09/X1 Capital account Opening balance Capital introduced in year £20,000 O a. Debit of £10,333 O b. Credit of £10,333 Debit of £13,667 Credit of £13,667 Anna O c. d. £20,000 £10,000 £15,000 £10,000 £10,000 £20,000 What is the net movement in the current account of Anna in respect of interest on drawings and interest on capital? £150,000 £200,000
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.
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