Case 1 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. Question: Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information answer the following ‘3’ questions. (Do not upload any documents in the moodle) 1-Identify which one of following statement is correct regarding the transfer of interest on capital at the end of the year: a. The amount of RO 7200 credited to profit and loss appropriation account b. The amount of RO 7200 debited to profit and loss appropriation account c. The amount of RO 3600 credited to profit and loss appropriation account d. The amount of RO 3600 debited to profit and loss appropriation account 2-The accounting treatment of commission of RO 5000 paid to partner Mansoor will be: a. Debited to Mansoor's capital account b. Credited to Mansoor's capital account c. Debited to profit and loss account d. Credited to profit and loss appropriation account 3-Identify which one of the following accounting entry for payment of salary to partner Mazin at the end of the year: a. Dr: Mazin's salary account RO 1000 Cr: Mazin's capital account RO 1000 b. Dr: Mazin's capital account RO 1000 Cr: Mazin's salary account RO 1000 c. Dr: Mazin's Salary account RO 12000 Cr: Mazin's capital account RO 12000 d. Dr: Mazin's capital account RO 12000 Cr: Mazin's salary account RO 12000

Case 1 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. Question: Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information answer the following ‘3’ questions. (Do not upload any documents in the moodle) 1-Identify which one of following statement is correct regarding the transfer of interest on capital at the end of the year: a. The amount of RO 7200 credited to profit and loss appropriation account b. The amount of RO 7200 debited to profit and loss appropriation account c. The amount of RO 3600 credited to profit and loss appropriation account d. The amount of RO 3600 debited to profit and loss appropriation account 2-The accounting treatment of commission of RO 5000 paid to partner Mansoor will be: a. Debited to Mansoor's capital account b. Credited to Mansoor's capital account c. Debited to profit and loss account d. Credited to profit and loss appropriation account 3-Identify which one of the following accounting entry for payment of salary to partner Mazin at the end of the year: a. Dr: Mazin's salary account RO 1000 Cr: Mazin's capital account RO 1000 b. Dr: Mazin's capital account RO 1000 Cr: Mazin's salary account RO 1000 c. Dr: Mazin's Salary account RO 12000 Cr: Mazin's capital account RO 12000 d. Dr: Mazin's capital account RO 12000 Cr: Mazin's salary account RO 12000

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 57P

See similar textbooks

Related questions

Question

Case 1

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.

Question:

Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information answer the following ‘3’ questions. (Do not upload any documents in the moodle)

1-Identify which one of following statement is correct regarding the transfer of interest on capital at the end of the year:

The amount of RO 7200 credited to profit and loss appropriation account

The amount of RO 7200 debited to profit and loss appropriation account

The amount of RO 3600 credited to profit and loss appropriation account

The amount of RO 3600 debited to profit and loss appropriation account

2-The accounting treatment of commission of RO 5000 paid to partner Mansoor will be:

Debited to Mansoor's capital account

Credited to Mansoor's capital account

Debited to profit and loss account

Credited to profit and loss appropriation account

3-Identify which one of the following accounting entry for payment of salary to partner Mazin at the end of the year:

Dr: Mazin's salary account RO 1000

Cr: Mazin's capital account RO 1000

Dr: Mazin's capital account RO 1000

Cr: Mazin's salary account RO 1000

Dr: Mazin's Salary account RO 12000

Cr: Mazin's capital account RO 12000

Dr: Mazin's capital account RO 12000

Cr: Mazin's salary account RO 12000

Expert Solution

Step by step

Solved in 2 steps

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