Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Saud, Salim and Sulaimon started a partnership firm on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals

Saud, Salim and Sulaimon 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 Saud is to be paid salary of RO. 12000 p.a. and Salim 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: Saud RO. 6,000, Salim RO. 4,000 and Sulaimon RO. 2,000. Interest on drawings was RO. 270 for Saud, RO.180 for Salim and RO. 90 for Sulaimon. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660.

Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts

1-

Identify which one of the following accounting entry for payment of salary to partner Saud at the end of the year:

a.

Dr: Saud's salary account RO 1000 Cr: Saud's capital account RO 1000

b.

Dr: Saud's capital account RO 12000 Cr: Saud's salary account RO 12000

c.

Dr: Saud's capital accountRO 1000 Cr: Saud's salary account RO 1000

d.

Dr: Saud's Salary account RO 12000 Cr: Saud's capital accountRO 12000

2-

At the end of the year, the share of profit eligible for partners after all adjustments will be:

a.

Saud: RO 3000, Salim: RO 2000, Sulaimon: RO 1000

b.

Saud: RO 6000, Salim: RO 6000, Sulaimon: RO 2000

c.

Saud: RO 9000, Salim: RO 6000, Sulaimon: RO 3000

d.

Saud: RO 12000, Salim: RO 8000, Sulaimon: RO 4000

3-

The balance of capital for partner Sulaimon at the end of the year will be:

a.

RO 31710

b.

RO 15885

c.

RO 37110

d.

RO 15485

FAST PLIZ NO TIME

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Handbook Of Energy Audits

Authors: Albert Thumann, Terry Niehus, William J. Younger

9th Edition

1466561629, 978-1466561625

More Books

Students also viewed these Accounting questions

Question

- What are the best pricing strategy and policy for our operation?

Answered: 1 week ago