Question

Question 4 Butler and John operate a music store as a partnership. The partnership agreement states that profits and losses are to be shared equally after adjusting for interest on capital, superannuation, drawings and salaries paid to the partners Income ($) Sales $896,900 Interest from Advance to John 2,000 Expenses ($) Cost of goods sold 416,000 Salary-Butler 63,000 Salary-employees 110,000 Superannuation to Butler 14,000 Superannuation to employees 13,000 Interest on capital to Butler 7,000 Interest on Capital to John 9,500 Interest on loan from CBA 19,000 Drawings to Butler 32,000 Drawings to John 17,000 Other deductible operating expenses 105,000 Additional information: Trading stock balances were estimated as follows: 30 June 2019 86,000 30 June 2020 94,000 Required: Calculate the net income of the partnership. Show the allocation of net income to each of the partners..

Answer 1

Answer-:

Trading and profit &loss a/c is to be prepared to calculate the net income of the partnership.

And profit and loss appropriation a/c is to be prepared to allocate net income among the partners.

Thankyou..........