Question 3 A and B are in a partnership in which profits and losses are shared equally. The partners’ balances on the capital and current accounts at the year ended December 31, 2020 were as followed:...

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Question 3


A and B are in a partnership in which profits and losses are shared equally.


The partners’ balances on the capital and current accounts at the year ended December 31, 2020 were as followed:



























Partners




Capital Account




Current Account






$




$



A



500,000



50,000 CR



B



450,000



75,000 CR





Notes:



I. During the year, A had drawings amounting to $250,000 and B $220,000.



II. B receives a partnership salary of $60,000 for extra duties in the company.



III. The net profit of the partnership, before taking any of the above into account was $600,000.



IV. Interest allowed on the capital account at the rate of 10% per annum, and interest to be charged on drawing at 10%.





Required:



a)
The Appropriation Account for A and B partnership business for the year ended December 31, 2020.






b) The partners’ capital account as at December 31, 2020



c) The partners’ current account as at December 31, 2020



Answered Same DayJul 10, 2022

Answer To: Question 3 A and B are in a partnership in which profits and losses are shared equally. The...

Nitish Lath answered on Jul 11 2022
75 Votes
Sheet1
            Partner's Appropriation account
                Memo
                A    B    Dr    Cr
            Profit for the year                600,0
00
            Partnership salary        60,000    60,000
            Interest on capital    50,000    45,000    95,000
            Interest on drawings    25,000    22,000        47,000
            Share in...
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