QUESTION 1Mweemba and Phiri are in partnership sharing profits and losses in the ratio 7:3 respectively. Thefollowing information has been taken from the partnership records for the year ended 31 May 2020.Partners' capital accountMweembak200,000Phirik140,000Partners' current accounts, balances as at 1 June 2019:MweembaK15, 000 CrPhiriK13, 000 CrDuring the year ended 31 May 2020 the partners made the following withdrawals from thepartnership bank account.MweembaPhirik10, 000 on 31 August 2019K10, 000 on 30 November 2019K10, 000 on 28 February 2020K10, 000 on 31 May 2020k7, 000 on 31 August 2019K7,000 on 30 November 2019K7,000 on 28 February 2020K7,000 on 31 May 2020Interest is to be charged on withdrawals at the rate of 12% per annum. Interest is allowed on capitalaccounts and credit balances on current accounts at the rate of 12% per annum.Phiri is to be allowed a salary of k15, 000 per annum.The Net profit of the partnership for the year ended 31 May 2020 is k102, 940.Required(a) A computation of the amount of interest chargeable on each Partner's withdrawals for theyear ended 31 May 2020.(b) The partnership appropriation account for the year ended 31 May 2020(c) A computation of the balance on each partner's current account as at 31 May 2020

Accounting of Partnership Accounting for partnerships is the practise of documenting and summarising…

Answered: (a) A computation of the amount of…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.
The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.
The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $10,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $ 30,000 B. $ 6,000 C. ($10,000)
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Balances in the ledger at 30 June 2021 R Capital : Tas Capital : Naz 407 000 363 000 Current account: Tas credit balance at 1 July 2020 8 052 Current account: Naz: debit balance at 1 July 2020 2 640 Drawings : Tas Drawings : Naz Profit for the year 88 000 140 800 438 636 Additional Information: The partnership agreement provides for the following that needs to be taken into account: 1. Partners are entitled to salaries as follows: Tas - R8 000 per month, Naz - R10 000 per month. 2. Interest on capital accounts are allowed at 12% per year on each partners capital on a pro-rata basis. Note the following that on 1 January 2021: Tas decreased her capital account by R27 000; and Naz increase her capital account by R17 000. 3. Interest at 10% per year is applicable to the opening balance of each partner's current account. 4. Naz is entitled to an annual bonus equal to 2% of the profit for the year before any appropriation from the profit for the year. 5. The remaining profits or losses are…
Problem 2: Statement of Changes in Equity - Partnership The following are taken from the accounting records of JFK Partnership. December 31, 2020 December 31, 2021 James, Capital P54,900 P64,900 Christine, Capital 53,200 63,900 Lolly, Capital 44,890 50,890 The partnership generated net income of P51,600 in 2020. According to the partnership contract, James, Christine and Lolly share profit and loss equally. The partnership contract allows each partner to withdraw P1,000 monthly. James and Christine each contributed P5,000 during the year. Loll did not make any contributions during the year. Required: 1. Prepare the partnership's Statement of Changes in Equity. 2. Determine if any of the partners violated the partnership contract provision on Drawings. Identify who among the partners it is.
Problem 1. Alucard and Chou organized their partnership on 01/01/19. The following entries were made into their capital accounts during 2019. Required: If partnership profits for the year equaled P66,000, indicate the allocations between the partners under the following independent profit-sharing allocation conditions: Interest of 10% is allocated on weighted average capital balance and the remainder is divided equally. A salary of P9,000 will be allocated to Chou; 10% interest on ending capital is allocated to the partners; remainder is divided 60/40 to Alucard and Chou, respectively. Salaries are allocated to Alucard and Chou in the amount of P10,000 and P15,000, respectively and the remainder is allocated in the proportion to weighted average capital balances. A bonus of 10% of partnership profits after bonus is credited to Alucard, a salary of P35,000 is allocated to Chou, a P20,000 salary is allocated to Alucard, 10% interest on weighted capital is allocated, and remainder is…
Problem 15. On December 31, 2020, the Statement of Financial Position of ABC Partnershipwith profit or loss ratio of 5:3:2 is presented below: CashP1,600,000Total LiabilitiesP2,000,000 Non Cash Assets1,400,000A, capital100,000 B, capital500,000 C, Capital400,000 On January 1, 2021, the partners decided to liquidate the partnership ininstallment. All partners are legally declared to be personally insolvent. As of January 31, 2021, the following transactions occurred: - Noncash Assets with book value of P1,000,000 were sold at a gain ofP100,000.00 - Liquidation expenses for the month of January amounting to P50,000 werepaid. - It is estimated that liquidation expenses amounting to P150,000 will be incurred For the month of February, 2021. - 20% of the liabilities to third person were settled. - Available cash were distributed to partners As of February 28, 2021, the following transactions occurred: - Remaining noncash assets were sold at a loss of P100,000 - The remaining liabilities to…
QUESTION THREE Pat, Matilda & Sammy were in partnership sharing profits in the ratio 3.2:1 respectively. A summary of the statement of financial position of the partnership as at September 31, 2022 is as follows: PAT, MATILDA & SAMMY Statement of Financial Position of the Partnership as at December 31, 2022 GHC Assets Plant & Machinery Moto vehicle Furniture & fittings Current Assets Inventory Trade receivables Cash and Bank Current Liabilities Trade payables Working Capital THE Represented By Capital account US Current account Non-Current Liability Pat Matilda Sammy Pat Matilda Sammy Loan account- Matilda Show Transcribed Text S You are required to prepare: i. The realization accounts ii. The Cash and Bank Account 10,000 3,600 7.400 Page 5 of 7 10,200 13,500 18.300 Ć 42,000 10.500 15,000 9,000 6.000 7,200 5,400 3.900 Due to a disagreement between Pat & Sammy, the partners decided to dissolve the partnership and the following decisions were taken in relation to the dissolution. GHO 7-0…
Problem 15. On December 31, 2020, the Statement of Financial Position of ABC Partnershipwith profit or loss ratio of 5:3:2 is presented below: CashP1,600,000Total LiabilitiesP2,000,000 Non Cash Assets1,400,000A, capital100,000 B, capital500,000 C, Capital400,000 On January 1, 2021, the partners decided to liquidate the partnership ininstallment. All partners are legally declared to be personally insolvent. As of January 31, 2021, the following transactions occurred: - Noncash Assets with book value of P1,000,000 were sold at a gain ofP100,000.00 - Liquidation expenses for the month of January amounting to P50,000 werepaid. - It is estimated that liquidation expenses amounting to P150,000 will be incurred For the month of February, 2021. - 20% of the liabilities to third person were settled. - Available cash were distributed to partners As of February 28, 2021, the following transactions occurred: - Remaining noncash assets were sold at a loss of P100,000 - The remaining liabilities to…
Problem 15. On December 31, 2020, the Statement of Financial Position of ABC Partnershipwith profit or loss ratio of 5:3:2 is presented below: CashP1,600,000Total LiabilitiesP2,000,000 Non Cash Assets1,400,000A, capital100,000 B, capital500,000 C, Capital400,000 On January 1, 2021, the partners decided to liquidate the partnership ininstallment. All partners are legally declared to be personally insolvent. As of January 31, 2021, the following transactions occurred: - Noncash Assets with book value of P1,000,000 were sold at a gain ofP100,000.00 - Liquidation expenses for the month of January amounting to P50,000 werepaid. - It is estimated that liquidation expenses amounting to P150,000 will be incurred For the month of February, 2021. - 20% of the liabilities to third person were settled. - Available cash were distributed to partners As of February 28, 2021, the following transactions occurred: - Remaining noncash assets were sold at a loss of P100,000 - The remaining liabilities to…

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(a) A computation of the amount of interest chargeable on each Partner's withdrawals for the year ended 31 May 2020. (b) The partnership appropriation account for the year ended 31 May 2020 (c) A computation of the balance on each partner's current account as at 31 May 2020