Prepare Profit and Loss Appropriation Account and partners’ capital accounts assuming that their capitals are fluctuating.
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- Ramesh and Suresh were partners in a firm sharing profits in the ratio of theircapitals contributed on commencement of business which were Rs. 80,000 and Rs. 60,000 respectively. The firm started business on April 1, 2016.According to the partnership agreement, interest on capital and drawings are12% and 10% p.a., respectively. Ramesh and Suresh are to get a monthly salaryof Rs. 2,000 and Rs. 3,000, respectively.The profits for year ended March 31, 2017 before making aboveappropriations was Rs. 1,00,300. The drawings of Ramesh and Suresh wereRs. 40,000 and Rs. 50,000, respectively. Interest on drawings amounted toRs. 2,000 for Ramesh and Rs. 2,500 for Suresh. Prepare Profit and LossAppropriation Account and partners’ capital accounts, assuming that theircapitals are fluctuating.A and B formed a partnership on March 1 , 20x1. A invested P250,000 and B 150,000. It was agreed that A, will be appointed as the managing partner and he will receive a salary of P60,000 per year and also 10% bonus on the net profit after the adjustment for the salary; the balance of the profit was to be shared in a 62.5:37.5 ratio to A and B, respectively. On December 31, 20x1, the following accounts are available: Cash 140,000 Accounts Payable 120,000 Accounts Receivable 134,000 Sales 466,000 Furniture and Fixtures 90,000 A, capital 250,000 Purchases 392,000 B, capital 150,000 Sales Return and Allowances 10,000 A, drawings (40,000) Operating expenses 120,000 B, drawings (60,000) On December 31, 20x1 the inventories on hand were P146,000; unused supplies P5,000; prepaid insurance were P1,900 (the entity uses the expense method). The accrued liabilities totaled P3,100 and the depreciation of furniture’s is 20%…A and B's partnership agreement provides for an annual salary allowance of P100,000 for A and 10%interest on the weighted average capital balance of B. The remainder is shared on a 60:40 ratio,respectively. During the period, the partnership earned profit of P200,000. B's capital account had abeginning balance of P120,00. B made additional investments of P40,000 on April 1, P80,000 on Sept.30, and P20,000 on Dec. 31, and made drawings of P60,000 on July 31.Requirement: Compute for the respective shares of the partners in the profit (Prepare profit distributionschedule)
- 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.A, B and C are partners sharing profits and losses in the ratio of 3:2:1 after the bonus (20% of net income) to A and the salary provision of P3,000 to A. They have beginning balances of P30,000 each at the beginning of the year. A contributed an additional P30,000 while B contributed an additional P20,000. The partnership had net income of P30,000. How much should be the increase in the capital balance of A?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.
- A and B’s partnership agreement provides for an annual salary allowance of P100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared on 60:40 ratio, respectively. During the period, the partnership earned a profit of P200,000. B’s capital account had a beginning balance of P120,000. B made additional investments of P40,000 on April 1, P80,000 on Sept. 30, and P20,000 on Dec. 31, made drawings of P60,000 on July 31. Compute the respective shares of the partners in the profit.A, B and C are partners in an accounting firm. Their capital account balances at year-end were: A, P90,000; B, P110,000; C, P50,000. They share profits and losses in a 4:4:2 ratio, after the following special terms:Partner C is to receive a bonus of 10% of the net income after the bonus.Interest of 10% shall be paid on that portion of a partner’s capital in excess of P100,000.Salaries of P10,000 and P12,000 shall be paid to partners A and C, respectively.Assuming a net income of P44,000 for the year, the total profit share of partner C would be: a. P7,800 b. P16,800 c. P19,400 d. P19,800 A local partnership has assets of cash of P5,000 and a building worth P80,000. All liabilities have been paid and the partners are all insolvent. The partners capital accounts are as follows Harry P40,000, Landers P30,000 and Waters 15,000. The partners share profits and losses 4:4:2. If the building is sold for P50,000, how much cash will Waters receive in the…A and B's partnership agreement provides for an annual salary allowance of 100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared equally. During the period, the partnership earned profit of P200,000. B's capital account had a beginning balance of P120,000. B made additional investments of P60,000on March 1, P40,000 on Sept. 30, and made drawings of P30,000 on Aug. 1 and P9,000 on Nov. 1 Compute the respective shares of the partners in the profit
- Mazin, Mansoor and Malik started a partnership firm on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of RO. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoor RO. 4,000 and Malik RO. 2,000. Interest on drawings was RO. 270 for Mazin, RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660. At the end of the year, the share of profit eligible for partners after all adjustments will be: a. Mazin: RO 3000, Mansoor: RO 2000, Malik: RO 1000 b. Mazin: RO 6000, Mansoor: RO 6000, Malik: RO 2000 c. Mazin: RO 12000, Mansoor: RO 8000, Malik: RO 4000 d. Mazin: RO 9000, Mansoor: RO 6000, Malik: RO 3000Mazin, Mansoor and Malik started a partnership firm on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of RO. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoor RO. 4,000 and Malik RO. 2,000. Interest on drawings was RO. 270 for Mazin, RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660. 1- Identify which one of following statement is correct regarding the transfer of interest on capital at the end of the year: 2- The accounting treatment of commission of RO 5000 paid to partner Mansoor will be: 3- Identify which one of the following accounting entry for transfer of net profit at the end of the year:…Mazin, Mansoor and Malik started a partnership firm on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of RO. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoor RO. 4,000 and Malik RO. 2,000. Interest on drawings was RO. 270 for Mazin, RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660. The balance of capital for partner Mansoor at the end of the year will be: a. RO 47220 b. RO 42270 c. RO 40720 d. RO 42720