Question
In: Accounting
Imran , Irphan and Issa started a partnership firm on January 1 , 2019. They contributed...
Imran , Irphan and Issa started a partnership firm on January 1 ,
2019. They contributed RO 25,000 RO 20,000 and RO 15,000
respectively as their capitals and decided to share profits in the
ratio of 3 : 2 : 1 . The partnership deed provided that Imran is to
be paid salary of RO 500p.m. and Irphan is to be paid a commission
of RO 2,500 . It also provided that interest on capital be allowed
@ 8 % p.a. The drawings for the year were : Imran RO 3,000 , Irphan
RO 2,000 and Issa RO 500. Interest on drawings was charged @ S % to
all partners . The net amount of profit as per the profit and loss
account for the year ended 2019 was RO 35,660 . Required : Prepare
the necessary journal entries relating to Profit and Loss
Appropriation .
I want a clear solution on the computer
Solutions
Expert Solution
| Date | Particular | Debit | Credit |
| 31.12.2019 |
P/L account. Dr To. P/L appropriation account (Being net profit transfered to P/L appropriation account recorded) |
35660 | 35660 |
| 31.12.2019 |
P/L appropriation account ac. Dr To salary to partners account (Imran) (Being salary paid to Imran recorded) |
6000 | 6000 |
| 31.12.2019 |
P/L appropriation ac. Dr To commision to partner account(Irphan ) (Being commision paid to Irphan recorded) |
2500 | 2500 |
| 31.12.2019 |
P/L appropriation account Dr. To Interest on capital (Imran) To Interest on capital(Irphan ) To Interest on capital (Issa ) (Being interest on capital paid to partners recorded) |
4800 |
2000 1600 1200 |
| 31.12.2019 |
Interest on drawings (Imran) ac Dr Interest on drawings (Irphan ) ac. Dr Interest on Drawings (Essa) To P/L Appropriation ac ( Being interest on drawings recorded) |
150 100 25 |
275 |
| 31.12.2019 |
P/L appropriation account Dr To Imran capital account To Irphans capital account To Essa capital account (Being balance in p/l appropriation account distributed to partners capital in the profit sharing ratio recorded) |
22635 |
11317.5 7545 3772.5 |
1.Computation of interest on capital(8%)
Irphan= 25000*0.08=2000
Imran = 20000*0.08=1600
Essa =15000*0.08=1200
2. Computation of interest on drawings
Interest on drawings given in question is S% let us take this as 5%
Imran=3000*0.05=150
Irphan =2000*0.05 =100
Essa =500*0.05 =25
ekkarill92 answered 2 years agoRelated Solutions
On January 1, Kirk, Picard, and Sisko formed S. T. Enterprises, a partnership. The partners contributed:...
On January 1, Kirk, Picard, and Sisko formed S. T. Enterprises,
a partnership. The partners contributed: Kirk-Cash
$14,000; Picard-Cash $49,000 and Land $62,000; Sisko-Equipment
$83,000. They share profits and losses 3:2:1, respectively.
Prepare journal entry:
Keystone Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the...
Keystone Manufacturing Company started operations on January 1,
2019. During 2019, the company engaged in the following
transactions: Issued common stock for $40,000. Paid $10,000 cash to
purchase raw materials used to make products. Transferred $9,000 of
raw materials to the production department. Paid $12,000 cash for
labor used to make products. Paid $18,000 cash for overhead costs
(assume actual and estimated overhead are the same). Finished work
on products that cost $35,000 to make. Sold products that cost
$31,500...
Keystone Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the...
Keystone Manufacturing Company started operations on January 1,
2019. During 2019, the company engaged in the following
transactions:
Issued common stock for $40,000.
Paid $10,000 cash to purchase raw materials used to make
products.
Transferred $9,000 of raw materials to the production
department.
Paid $12,000 cash for labor used to make products.
Paid $18,000 cash for overhead costs (assume actual and
estimated overhead are the same).
Finished work on products that cost $35,000 to make.
Sold products that cost $31,500...
On January 1, Year 1, Marla, Jackson, and Helena started a partnership for a silk-screen t-shirt...
On January 1, Year 1,
Marla, Jackson, and Helena started a partnership for a silk-screen
t-shirt shop called Smar-Tees and are all active in the management
of the company. The company uses a calendar year tax period. Marla,
Jackson, and Helena’s initial outside tax bases in their
partnership interests were $5,000, $50,000, and $60,000,
respectively. These bases include all relevant property contributed
and debt allocations from the date of initiation. On the date the
partnership was initiated, the only debt...
On March 1, Eckert and Kelley formed a partnership. Eckert contributed $74,000 cash, and Kelley contributed...
On March 1, Eckert and Kelley formed a partnership. Eckert
contributed $74,000 cash, and Kelley contributed land valued at
$59,200 and a building valued at $89,200. The partnership also took
Kelley’s $64,000 long-term note payable associated with the land
and building. The partners agreed to share income as follows:
Eckert gets an annual salary allowance of $31,000, both get an
annual interest allowance of 10% of their initial capital
investment, and any remaining income or loss is shared equally. On...
On March 1, Eckert and Kelley formed a partnership. Eckert contributed $92,000 cash, and Kelley contributed...
On March 1, Eckert and Kelley formed a partnership. Eckert
contributed $92,000 cash, and Kelley contributed land valued at
$73,600 and a building valued at $103,600. The partnership also
took Kelley’s $82,000 long-term note payable associated with the
land and building. The partners agreed to share income as follows:
Eckert gets an annual salary allowance of $31,500, both get an
annual interest allowance of 8% of their initial capital
investment, and any remaining income or loss is shared equally. On...
On March 1, Eckert and Kelley formed a partnership. Eckert contributed $94,000 cash, and Kelley contributed...
On March 1, Eckert and Kelley formed a partnership. Eckert
contributed $94,000 cash, and Kelley contributed land valued at
$75,200 and a building valued at $105,200. The partnership also
took Kelley’s $84,000 long-term note payable associated with the
land and building. The partners agreed to share income as follows:
Eckert gets an annual salary allowance of $29,500, both get an
annual interest allowance of 10% of their initial capital
investment, and any remaining income or loss is shared equally. On...
On March 1, Eckert and Kelley formed a partnership. Eckert contributed $81,000 cash, and Kelley contributed...
On March 1, Eckert and Kelley formed a partnership. Eckert
contributed $81,000 cash, and Kelley contributed land valued at
$64,800 and a building valued at $94,800. The partnership also took
Kelley’s $71,000 long-term note payable associated with the land
and building. The partners agreed to share income as follows:
Eckert gets an annual salary allowance of $29,000, both get an
annual interest allowance of 9% of their initial capital
investment, and any remaining income or loss is shared equally. On...
Norr and Caylor established a partnership on January 1, 2019.Norr invested cash of $100,000 and...
Norr and Caylor established a partnership on January 1, 2019.
Norr invested cash of $100,000 and Caylor invested $30,000 in cash
and equipment with a book value of $40,000 and fair value of
$50,000. For both partners, the beginning capital balance was to
equal the initial investment. Norr and Caylor agreed to the
following procedure for sharing profits and losses: 12% interest on
the yearly beginning capital balance $10 per hour of work that can
be billed to the partnership's clients the remainder...
Norr and Caylor established a partnership on January 1, 2019. Norr invested cash of $100,000 and...
Norr and Caylor established a partnership on January 1, 2019.
Norr invested cash of $100,000 and Caylor invested $30,000 in cash
and equipment with a book value of $40,000 and fair value of
$50,000. For both partners, the beginning capital balance was to
equal the initial investment. Norr and Caylor agreed to the
following procedure for sharing profits and losses:
12% interest on the yearly beginning capital balance
$10 per hour of work that can be billed to the partnership's...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What are the options that might be considered in relation to introducing flexible work practices? What...
- Question 2 : Aggregate Scores: Write a program that opens 2 files, quiz.txt, and hw.txt. The...
- Define the term symbiosis specifically as it applies in a biological context. Compare and contrast parasitism,...
- A research team conducted a study showing that approximately 20% of all businessmen who wear ties...
- Research the internet for companies that have executed data science projects. Pick one company and describe...
- Explain two theories or frameworks for understanding how Western Europe emerged out of 1,000 years of...
- Two cannons are mounted as shown in the drawing and rigged to fire simultaneously. They are...
ADVERTISEMENT