Salim, Osama and Javid are partners. They share profits and losses in the ratio of 2/5, 2/5 and 1/5 respectively. For the year ended 31st December 2018, their capital accounts remained at the following amounts Salim 6,000 Osama 4,000 Javid 2,000 They have agreed to give each other 10% interest per annum on their capital accounts. In addition to the above, partnership salaries of RO 3,000 for Osama and RO 1,000 for Javid are to be charged. The net profit of the partnership, before taking any of the above into accounts was RO 25,200. You are required to draw up the appropriation account of the partnership for the year ended 31st Dec 2018
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.
Homework Activity 3
Salim, Osama and Javid are partners. They share
For the year ended 31st December 2018, their capital accounts remained at the following amounts
Salim 6,000
Osama 4,000
Javid 2,000
They have agreed to give each other 10% interest per annum on their capital accounts.
In addition to the above, partnership salaries of RO 3,000 for Osama and RO 1,000 for Javid are to be charged.
The net profit of the partnership, before taking any of the above into accounts was RO 25,200.
You are required to draw up the appropriation account of the partnership for the year ended 31st Dec 2018
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