Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Q3: Smith and Clarke are partners in a business sharing profits and losses in the ratio of 2:1. On 1st January 2020, their capitals were;
Q3: Smith and Clarke are partners in a business sharing profits and losses in the ratio of 2:1. On 1st January 2020, their capitals were; Smith $ 17200; Clarke $ 12000. The partnership deed provided that interest at 6 per cent p.a. was to be credited to partner's capital from profits prior to division and Clarke was to be allowed a salary of $ 75 per month. On 31" December, 2020, profit after charging interest on capitals but before charging Clarke's salary amounted to $ 13250. During the year they had withdrawn $ 500 each for private expenses. Out of this, they agree that $ 570 shall be set aside to the provision for contingencies. Instructions: Give Profit and Loss Account of partners
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started