Abha, Shobha and Vibha are partners sharing profits and losses in the proportion of 1/2, 3/10
and 1/5 respectively. On 1st April 2018 their capital were 1,20,000, 72,000 and 348,000
respectively. On 1st June, 2018 Abha advanced a loan of 1,00,000. Their partnership deed provides
that:
a) Interest on partner's capital should be provided @ 5% p.a.
b) Abha & Vibha are entitled to a partnership salary of 3000 and 2000 P.M.
c) Shobha is entitled to a commission @ 10% on the net profit (after charging the above
provision and after charging her commission).
d) Interest on partners' drawings should be provided @ 12% p.a. (Drawings of Abha 320,000
Shobha 12,000 Vibha 8,000).
e) 1/4 of the net profit (after charging all the above provisions ) should be transferred to
General Reserve.
The profit for the year ended March 31" 2019 amounted to 1,05,000 after charging partners
salaries but before charging interest on Abha's loan.
Pass Journal Entries and Prepare P&L Appropriation A/c for the year ended 31/03/2019,
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Answer:
Dr Rathana capital account Cr
Particulars Amt Particulars Amt
To goodwill a/c 8000 By bal b/d 30000
To Rathana executors a/c 26750 By R & S 3000
By P & L A/c 1000
By Int. On capital 750
34750 34750
Dr Rathana executors account Cr
Particulars Amt Particulars Amt
To bal c/d 26750 By Rathana A/c 26750
26750 26750
Explanation:
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