The partnership of Ibrahim and Rawan has the following provisions: ⚫ Ibrahim and Rawan receive salary allowances of SAR 50,000 and SAR 15,000, respectively. Interest is imputed at 5% on the average capital investment. • Any remaining profit or loss is shared between Ibrahim and Rawan in a 3:1 ratio, respectively. • Average Capital investments: Ibrahim, SAR 300,000; Rawan, SAR 150, 000 Net income SAR 300,000 Required: pass journal entry to allocate the profit between Ibrahim and Rawan (PLEASE DO NOT PUT SCREENSHOTS OR HAND WRITING)
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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