The following balances were extracted from the books of Ben and Ken as at 31/12/2017: Capital Accounts:
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Question:
- The following balances were extracted from the books of Ben and Ken as at 31/12/2017:
Capital Accounts: Sh.
Ben 400,000
Ken 300,000
Current Accounts:
Ben 34,500 Cr
Ken 26,800 Dr
Drawings:
Ben 80,000
Ken 120,000
Net profit for the year 447,750
The following information is also available from their partnership agreement:
- The partners are entitled to receive 5% interest on capital
- Ken is to receive a partnership salary of Sh. 60,000
- Interest is to be charged on drawings as follows: Ben Sh. 2000; Ken Sh. 1250
- Ben and Ken are to share profits and losses in the ratio 3:2
Required; a) Show the profit and loss appropriation account for the year ended 31 Dec 2017
b) Show the partners capital and current accounts for the year ended 31 December 2017
- Show how the profits/losses would be distributed and how much each partner would receive if there was no partnership agreement
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