1. A. Ali, Hamid and Ahmed started a partnership firm on January 1, 2019. They contributed RO. 75,000, RO. 60,000 and RO. 45,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Ali is to be paid salary of RO. 1,500 p.m. and Hamid commission of RO. 7,500. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Ali RO. 9,000, Hamid RO. 6,000 and Ahmed RO. 3,000. Interest on drawings was RO. 405 for Ali, RO. 270 for Hamid and RO. 135 for Ahmed. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 54,990. You are required to record the necessary journal entries relating to appropriation of profit and prepare the profit and loss appropriation account and the partners' capital accounts under both fixed and flexible capital method. 2. A. Show how the following items will appear in the capital accounts of the partners Ali and Ahmed when their capital is a) fixed b) fluctuating. Particulars Ali (RO) Ahmed (RO) Capital on 1.4.2019 90,000 70,000 Drawings during 2019-2020 12,000 9,000 Interest on drawings Interest on capital 5,400 4,200 Partner's salary 12,000 Commission 6,000 Share of profit for 2019-20 6,000 4,000 360 270 B. Rima and Sami were partners in a firm sharing profits in the ratio of their capitals contributed on commencement of business which were RO. 240,000 and RO. 180,000 respectively. The firm stared business on April 1, 2019. According to the partnership agreement interest on capital and drawings are 12% and 10% p.a. respectively. Rima and Sam are to get a monthly salary of RO. 6,000 and RO. 9,000 respectively. The profits for year ended March 31, 2020 before making above appropriation was RO, 300,900. The drawings of Rima and Sam were RO. 120,000 and RO. 150,000, respectively. Interest on drawings amounted to RO. 6,000 for Rima and RO 7,500 for Sam. Prepare Profit and Loss Appropriation Account and partners' capital accounts assuming that their capitals are fluctuating. C. The average net profits expected in future by Khadija and Co. are RO. 90,000 per year. The total assets of the firm amounted to RO. 990,000 and liabilities are RO. 190,000. The normal rate of return on the capital employed in similar business is 10%. Calculate goodwill of the firm under Super Profit Method on the basis of two-year purchase and Capitalization Method