Question No:1 Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020 Some of the key extracts of the partnership deed is given as follows: Resolved that. Each partner is to bring in OMR 15,000 as capital Each partner is to get 5% interest on capital Suhail is entitled to get a salary of OMR 400 per month Firm is entitled to charge 6% interest per annum on partner’s drawings. Summary of transactions: November: 2020 Capital contribution: Mr. Suhail –OMR 15000; Mr. Said: OMR 15000 Purchase of goods- OMR 8,000 Sales of goods- OMR 18,000 Wages- OMR 200 Salary to employees- OMR 1,200 Other administrative expenses- OMR 800 Rent of building- OMR 1,000 Electricity charges- OMR 15 Water charges- OMR 5 Travelling expenses- OMR 50 Furniture purchase- OMR 1,500 Electrical fittings- OMR 200 Drawings of partners-: Mr. Suhail –OMR 200; Mr. Said; OMR 150 Salary to Mr. Suhail- OMR 400 December 2020: Salary to employees- OMR 1,200 Rent of building- OMR 1,000 Electricity charges- OMR 12 Water charges- OMR 4 Travelling expenses- OMR 20 Other administrative expenses- OMR 200 Salary to Mr Suhail-OMR 400 Purchase of goods- OMR 10,000 Sales of goods OMR 18,000 Closing stock at the end of the year is valued at OMR 20,000 Required: Trading, profit and loss account for the year ended 31st December 2020 Profit and loss appropriation account for the year ended 31st December 2020 Partner’s Capital account as per fluctuating method and fixed method

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter11: Invest Or Losses

Section: Chapter Questions

Problem 35P

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Question No:1

Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020

Some of the key extracts of the partnership deed is given as follows:

Resolved that.

Each partner is to bring in OMR 15,000 as capital
Each partner is to get 5% interest on capital
Suhail is entitled to get a salary of OMR 400 per month
Firm is entitled to charge 6% interest per annum on partner’s drawings.

Summary of transactions:

November: 2020

Capital contribution: Mr. Suhail –OMR 15000; Mr. Said: OMR 15000
Purchase of goods- OMR 8,000
Sales of goods- OMR 18,000
Wages- OMR 200
Salary to employees- OMR 1,200
Other administrative expenses- OMR 800
Rent of building- OMR 1,000
Electricity charges- OMR 15
Water charges- OMR 5
Travelling expenses- OMR 50
Furniture purchase- OMR 1,500
Electrical fittings- OMR 200
Drawings of partners-: Mr. Suhail –OMR 200; Mr. Said; OMR 150
Salary to Mr. Suhail- OMR 400

December 2020:

Salary to employees- OMR 1,200
Rent of building- OMR 1,000
Electricity charges- OMR 12
Water charges- OMR 4
Travelling expenses- OMR 20
Other administrative expenses- OMR 200
Salary to Mr Suhail-OMR 400
Purchase of goods- OMR 10,000
Sales of goods OMR 18,000

Closing stock at the end of the year is valued at OMR 20,000

Required:

Trading, profit and loss account for the year ended 31^st December 2020
Profit and loss appropriation account for the year ended 31^st December 2020
Partner’s Capital account as per fluctuating method and fixed method
Balance sheet of the firm as on 31.12.2020

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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