Mazin, Mansoor and Malik started a partnership fim on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and de profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of RO. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It that interest on capital be allowed e 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoar RO. 4,000 and Malik RO. 2,000. Interest an drawings was RO. RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660. Question: Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information ans tollowing '3 questions. (Do not upload any documents in the moodle)
Mazin, Mansoor and Malik started a partnership fim on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and de profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of RO. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It that interest on capital be allowed e 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoar RO. 4,000 and Malik RO. 2,000. Interest an drawings was RO. RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660. Question: Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information ans tollowing '3 questions. (Do not upload any documents in the moodle)
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 2BD
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Question
Transcribed Image Text:Case 1
Mazin, Mansoor and Malik started a partnership firm on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and decided to share
profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of Ro. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It also provided
that interest on capital be allowed @ 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoor RO. 4,000 and Malik RO. 2,000. Interest on drawings was RO. 270 for Mazin,
RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660.
Question:
Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information answer the
following 3' questions. (Do not upload any documents in the moodle)
The amount of interest on capital the partners are eligible to receive during the year will be:
O a. Mazin RO 6000, Mansoor RO 4800, Malik RO 3600
O b. Mazin RO 3000, Mansoor RO 2400, Malik RO 1800
O. Mazin RO 4000, Mansoor RO 2000, Malik RO 1200
O d. Mazin RO 2400, Mansoor RO 1800, Mailik RO 2400
The accounting treatment of capital invested in partnership business will be:
O a. Debited to profit and loss appropriation account
O b. Debited to cash account
O. Debited to partners' capital account
O d. Credited to cash account
we
docx
Transcribed Image Text:The accounting entry for charging interest on drawings to each partners will be:
Dr: Mazin's capital account RO 270
Dr: Mansoor's capital account RO 180
Dr: Malik's capital account RO 90
Cr. Interest on drawings account RO 540
O b. Dr: Mazin's capital account RO 135
Dr: Mansoor's capital account RO 90
Dr: Malik's capital account RO 45
Cr. Interest on drawings account RO 270
OC Dr: Mazin's capital account RO 270
Dr: Mansoor's capital account RO 180
Dr: Malik's capital account RO 90
Cr. Profit and loss account RO 540
d.
Dr: Interest on drawing account RO 270
Cr. Mazin's capital account RO 135
Cr. Mansoor's capital account RO 90
Cr. Malik's capital account RO 45
docx
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