X, Y and Z were the partners in a partnership firm. The following information were relating to the business at the end of the year 2019: i. Capital balance of partners X, Y, Z as on 1st January, 2019 was RO 120000, RO 80000 and RO 60000 respectively. ii. Current account balance of partners as on 1st January, 2019: X: RO 45500 (Cr), Y: RO 32600 (Dr) Z: RO 22100 (Cr) iii. Drawings taken by the partners during the year was: X: RO 8800 Y: RO 7500 Z: RO 5400 iv. Interest on drawings was @ 7% and interest on capital was RO 5% v. Partner X entitled to a salary of RO 3200 per year and Partner Y entitled to a salary of RO 150 per month. vi. Partner has earned a commission of RO 3800 vii. Partner Z has paid an additional capital of RO 7000 and partner X has withdrawn the capital of RO 24000 viii. There was a profit of RO 45000 which was transferred from profit and loss appropriation account and partners X, Y, Z shared that profit in the ratio of 3 : 4 : 3 respectively. The closing balances of partners' current account will be: a. X RO 58748 (Dr), Y RO 16852 (Cr), Z RO 36620 (Dr) b. X RO 58784 (Dr), Y RO 16825 (Cr), Z RO 36622 (Dr) c. X RO 58984 (Dr), Y RO 16925 (Dr), Z RO 36626 (Dr) d. X RO 59784 (Dr), Y RO 17825 (Cr), Z RO 37622 (Dr)
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.
X, Y and Z were the partners in a
i. Capital balance of partners X, Y, Z as on 1st January, 2019 was RO 120000, RO 80000 and RO 60000 respectively.
ii. Current account balance of partners as on 1st January, 2019: X: RO 45500 (Cr),
Y: RO 32600 (Dr)
Z: RO 22100 (Cr)
iii. Drawings taken by the partners during the year was: X: RO 8800
Y: RO 7500
Z: RO 5400
iv. Interest on drawings was @ 7% and interest on capital was RO 5%
v. Partner X entitled to a salary of RO 3200 per year and Partner Y entitled to a salary of RO 150 per month.
vi. Partner has earned a commission of RO 3800
vii. Partner Z has paid an additional capital of RO 7000 and partner X has withdrawn the capital of RO 24000
viii. There was a profit of RO 45000 which was transferred from
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