Tom and Faith are in a partnership sharing profits and losses in the ratio of 3/5 for Tom and 2/5 for Faith. The partnership deed provides for interest on capital at the rate of 5% and interest on drawings at 10% per annum. The partners are entitled to annual salaries of $ 2,000 and $1,000 for Tom and Faith respectively. The following balances were extracted from the books of the partnership as at 30th, September 2020: $ Capital accounts: Tom 14,000 Faith 10,000 Current accounts: Tom 4,000 Faith 2,500 Drawings: Tom 3,800 Faith 2,200 During the year the partners had made a net profit of $15,000 for the business. Required: Prepare the partners’ current accounts as at 30th September 2020.
Tom and Faith are in a partnership sharing profits and losses in the ratio of 3/5 for Tom and 2/5 for Faith. The partnership deed provides for interest on capital at the rate of 5% and interest on drawings at 10% per annum. The partners are entitled to annual salaries of $ 2,000 and $1,000 for Tom and Faith respectively. The following balances were extracted from the books of the partnership as at 30th, September 2020: $ Capital accounts: Tom 14,000 Faith 10,000 Current accounts: Tom 4,000 Faith 2,500 Drawings: Tom 3,800 Faith 2,200 During the year the partners had made a net profit of $15,000 for the business. Required: Prepare the partners’ current accounts as at 30th September 2020.
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PB: The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a...
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Tom and Faith are in a partnership sharing
The following balances were extracted from the books of the partnership as at 30th, September 2020:
| $ | |
|---|---|
| Capital accounts: | |
| Tom | 14,000 |
| Faith | 10,000 |
| Current accounts: | |
| Tom | 4,000 |
| Faith | 2,500 |
| Drawings: | |
| Tom | 3,800 |
| Faith | 2,200 |
During the year the partners had made a net profit of $15,000 for the business.
Required:
Prepare the partners’ current accounts as at 30th September 2020.
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