After closing the revenue and expense accounts, the profit for the year ended December 31, 2024, of Sharon & Laura Partnership is $90,900. The partnership agreement specifies that profits and losses will be shared using the following formula. 1. Allocate salary allowances of $26,700 to Sharon and $37,500 to Laura. Remaining profit (loss) is to be shared on a ratio of 2:1. 2. At the beginning of the year, Sharon's capital account had a balance of $32,000 and Laura's capital account had a balance of $23,500. Sharon withdrew $1,068 cash per month while Laura withdrew $2,136 per month from the partnership. Prepare a schedule to show how the profit will be allocated to the two partners. (Round answers to O decimal places, e.g. 5,275.)
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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