Question

16. X, Y and Z are in partnership. They share profits : X two-fifths, Y two-fifths and Z one-fifth. The
partnership agreement provides that interest at 8% p.a. shall be paid on the credit balance of each
partner's Capital Account at the beginning of each financial year, that no interest is to be charged on
drawings, and that Z is to receive a salary of 7,500 per annum and 2% commission on the balance of
trading profit after charging his salary but before charging interest on capital
The balance of the Capital Account at 1st January, 2018, are : X * 40,000, Y 30,000 and Z * 10,000.
Drawings during the year amount to : X 13,000 ; Y 39,250 and 212,000. The trading profit for the
year ending 31st December, 2018 was 36,500.
Prepare :
(a) An account showing the division of the trading profit in accordance with the terms of the
partnership agreement.
(b) The Capital Account of each of the partners during the year.​

Answer 1

Answer:

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