X and Y enter into a partnership on 1st April, 2014 with capitals of $ 20,000 and $ 40,000 respectively. Asper partnership Deed.X and Y are entitled to receive Salary of $ 200 per month and $ 300 per month respectively.(i)(ii)(iii)Interest on Capital is to allowed at the rate of 6% p.a.The profit sharing ratio of X and Y will be 1:1.Profit earned during the year 2014-15 amounted to $ 50,000. Give Journal entries and prepare the Profitand Loss Appropriation Account.

Answered: Image /qna-images/answer/0d65f448-5d64-417d-b8c7-14e0db5a299b.jpg

X and Y enter into a partnership on 1st April, 2014 with capitals of $ 20,000 and $ 40,000 respectively. As per partnership Deed. X and Y are entitled to receive Salary of $ 200 per month and $ 300 per month respectively. (i) (ii) Interest on Capital is to allowed at the rate of 6% p.a. (ii) The profit sharing ratio of X and Y will be 1:1. Profit earned during the year 2014-15 amounted to $ 50,000. Give Journal entries and prepare the Profit and Loss Appropriation Account.

X and Y enter into a partnership on 1st April, 2014 with capitals of $ 20,000 and $ 40,000 respectively. As per partnership Deed. X and Y are entitled to receive Salary of $ 200 per month and $ 300 per month respectively. (i) (ii) Interest on Capital is to allowed at the rate of 6% p.a. (ii) The profit sharing ratio of X and Y will be 1:1. Profit earned during the year 2014-15 amounted to $ 50,000. Give Journal entries and prepare the Profit and Loss Appropriation Account.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: anie, Justin and Adam are in partnership sharing profits and losses equally after allowing for…

A: It is an agreement between two or more parties to conduct the business and share the profits and…

Q: David and Isac are in partnership, sharing profits 3:2. On 1 July 2020 Casey joins the partnership.…

A: The partnership comes to existence when two or more persons agree to do the business together and…

Q: vanhoe Company sells its product for $10400 per unit. Variable costs per unit are: manufacturing,…

A: Income = Sale - Variable Manufacturing - Variable Selling and admin - Fixed Manufacturing - Fixed…

Q: Oliva Tsang and David Breck began a partnership by investing $5,000 and $45,000 respectively. For…

A: Introduction:- Oliva Tsang and David Breck invested $5,000 and $45,000, respectively, to start their…

Q: Requirement: Compute for the respective shares of the partners in the profit.

A: Meaning of Partnership firm Partnership is in association of two or more individuals wherein they…

Q: How much is the capital of AA upon formation of the partnership on January 1, 2017? How much is the…

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: Reena and Raman are partners with capitals of Rs. 3,00,000 and Rs. 1,00,000 respectively. The profit…

A: In the given problem, the partners are entitled to equal profits after appropriations of interest on…

Q: The partnership of Abel and Caine was formed on February 28, 2017. At that date the following assets…

A: Partnership means where two or more person comes together to run the business and share profit or…

Q: Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The…

A: Profit sharing ratio = 2:3:5 Bonus to Zane = 10% of the Original amount of Net Income Salary…

Q: At the beginning of 2023, Rami and Ali invested $200,000 and $300,000 cash in a partnership…

A: The objective of the question is to allocate the partnership profit between Rami and Ali based on…

Q: 1. Ceradoy, Manongsong and Anuran are partners sharlng of 3:2:1. The partnership agreement provides…

A: The residual profit seems to be the sum of profit that remains after accounting for the notion that…

Q: e net loss for the first year of operations is $20,000 and net income for the subsequent year is…

A: Capital -The capital means the assets and cash in a business. Capital may either be cash, machinery,…

Question

X and Y enter into a partnership on 1st April, 2014 with capitals of $ 20,000 and $ 40,000 respectively. As
per partnership Deed.
X and Y are entitled to receive Salary of $ 200 per month and $ 300 per month respectively.
(i)
(ii)
(iii)
Interest on Capital is to allowed at the rate of 6% p.a.
The profit sharing ratio of X and Y will be 1:1.
Profit earned during the year 2014-15 amounted to $ 50,000. Give Journal entries and prepare the Profit
and Loss Appropriation Account.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Amal, Asma and Maali started a Partnership Firm on January 1, 2021 with capital OMR 30,000 OMR 20,000 and OMR 10,000 respectively and share profits in the ratio of 3:2:1. The Partnership Deed provided that Asma is to be paid Salary of OMR 200 p.m. and Amal Commission of OMR 1,000. It also provided that Interest on Capital be allowed @ 5% p.a. The Drawings for the year were: Amal OMR 1,000, Asma OMR 5,000 and Maali OMR 3,000. Interest on Drawings was OMR 100 for Amal, OMR 50 for Asma and OMR 30 for Maali. The net amount of profit as per the Profit and Loss Account for the year ended 2021 was OMR 24,000. You are required to record the necessary journal entries relating to appropriation of profit and prepare the profit and loss appropriation account and the partners' capital accounts.
Show your solution and answer.
YES Partnership started operations on January 2, 2016 with the following capital balances: Yves 88,000 Ernest 64,000 Serge 90,000 Their profit and loss agreement has the following provisions: - Yves will be given an annual salary of 16,000 and Serge 8,000 - All partners will be given 10% interest on beginning capital balances every year - The balance of the profit, or the loss, will be divided on a 2:3:5 to Yves, Ernest and Serge, respectively. - Each partner is allowed to withdraw up to 8,000 every year In 2016, partnership operations resulted in a net loss of 16,000, while in 2017, it was a net profit of 32,000. All partners withdrew the maximum amount of 8,000 each year. Required: Compute the following: 1. Share in Net Profit or Net Loss for 2016 and 2017 2. Ending Capital of each partner for 2016 and 2017
Curtis and Sillett are in partnership, sharing profits in the ratio 3:2 and compiling their accounts to 30 June each year. On 1 January 2015, Mcallister joined the partnership, and from that the date the profit sharing ratio became Curtis 50%, Sillett 25% and Mcallister 25%, after providing for salaries for Sillet and Mcallister of $20,000 and $12,000 pa respectively. The partnership profit for the year ended 30 June 2015 was $480,000, accruing evenly over the year. What are the artners' total profit shares for the year ended June 2015? А. Curtis-256,000 , Sillet - 162,000 , Mcallister - 62,000 В. Curtis -264,000 , Sillet - 156,000 , Mcallister -60,000 С. Curtis - 264,000 , Sillet - 166,000 , Mcallister - 66,000 D. Curtis - 248,000 , Sillet - 168,000 , Mcallister - 64,000
One, Two and Three are partners sharing profits and losses in the ratio of 2:3:5 respectively. The partnership is balance sheet at August 30, 2016 follows:One 40,000 Two 60,000 Three 100,000 A.Assuming that Ako is admitted to purchase interest and paid 40,000 for a 40% interest. 1.How much is the total capital after Ako's Admission? 2.What will be the new share of Three after Ako's Admission? 3.What us the Adjusted capital of Two after Ako's admission? B. Assuming that Ako is admitted by purchase of interest from Three and paid 60,000 for a 30% interest. 1. What will be the new share of Three after Ako's Admission? 2. What amount will be credited to Ako upon his admission? 3. What is the adjusted capital of Thee after Ako's admission C. Assuming that Ako is admitted by investing 40,000 for a 40% interest. No revaluation of assets is to be recognized. 1. How much is the total capital after Ako's Admission? 2. What is the adjusted capital of Three after Ako's admission? 3. What…
Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2014 is $300,000 for Xavier, $250,000 for Young, and $325,000 for Zane. An 8% interest allocation is provided to each partner based on the average capital balance on December 31, 2014. Xavier and Young receive salary allocations of $10,000 and $15,000, respectively. If partnership net income is above $25,000, after the salary allocations are considered (but before the interest allocations are considered), Zane will receive a bonus of 10% of the original amount of net income. All residual income is allocated in the ratios of 2:3:5 to Xavier, Young, and Zane, respectively. Part 1: Prepare a schedule to allocate income to the partners assuming that partnership net income for 2014 is $250,000. Part 2: Prepare a journal entry to distribute the partnership's income to the partners (assume that an Income Summary account is used by the…
8 A, B and C formed a partnership on January 1, 2007 with investments of $200,000, $300,000 and $400,000 respectively. The profit and loss sharing ratio is 20% for A, 30% for B and 50% for C. For division of income, they have agreed: 1. interest of 10% of beginning capital balance each year 2. annual compensation of $10,000 for B. The partnership earns $500,000 in its first year of operation. Each partner draws $1000 a month. What is B’s share of the net income What is C’s capital balance at the end of the first year
The following are the partnership agreement between partners Baby Love & Honey Sweet for their partnership’s profit distribution:A. Each partners shall be entitled for an annual salary of P50,000 each.B. 15% Bonus of partnership profits after salaries to Honey Sweet being a managing partner.C. 20% interest is given to both partners based on average capital ratio.D. Residual profit and loss shall be distributed on the ratio 2:2The ledgers of their capital balances are shown below: Baby Love Debit: July 1. P20,000 Credit: Jan 1. P80,000 Oct 1. P40,000 Honey Sweet Debit: Oct 1. P10,000 Credit: Jan 1. P120,000 May 1. 30,000 The partnership profit for the year is P150,000 before distribution to partners Required: 1. Prepare a Schedule for Profit Distribution.2. Journal entry to record the distribution of profit to partners.
Show your solution and answer.
9. JJ&T Partnership has three partners, James Small, Josh Platt, and Turner Lyle, who allocate net income according to the services provided and any remainder equally. The partnership agreement states that James and Turner will provide services for $2,500 a month while Josh will provide services for $3,750. For the fiscal year ending December 31, 2015, the partnership earned $192,600. Determine the amount allocated to each partner and prepare the journal entry to record the division of net income.