Das and Sharma started a partnership business in the ratio of 3: 2. They contributed
32,00,000 and 1,60,000 respectively towards their capitals. The following are the
terms and conditions of the agreement :
(1) Interest on Capital allowed and charged on drawings @ 8% pa
(2) Das and Sharma are to get monthly salary of 2,000 and 3,000 respectively
(3) Their Profit & Loss A/c for the year ended 31st Dec. 2019 showed a net profit
of 1,20,000.
During the year Das and Sharma withdrew Cash 20,000 and 3 8.000 respectively
for their personal use.
Sharma also took goods worth 1,000 (selling Price 1,200) during the year. Goods
were charged to Sharma at selling price as per the partnership agreement
Prepare Profit and Loss Appropriation Account and partners' Capital Accounts
assuming that the Capitals are fixed.
Answers
Answer:
Question 1:
Define Partnership Deed.
ANSWER:
Partnership Deed is a written agreement among the partners of a partnership firm. It includes agreement on profit sharing ratio, salaries, commission of partners, interest provided on partner's capital and drawings and interest on loan given or taken by the partners, etc. Generally following details are included in a partnership deed.
1. Objective of business of the firm
2. Name and address of the firm
3. Name and address of all partners
4. Profit and loss sharing ratio
5. Contribution to capital by each partner
6. Rights, types of roles and duties of partners
7. Duration of partnership
8. Rate of interest on capital, drawings and loans
9. Salaries, commission, if payable to partners.
10. Rules regarding admission, retirement, death and dissolution of the firm, etc.