Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tom and Faith are in a partnership sharing profits and losses in the ratio of ? 3 5 for Tom and ? 2 5 for

Tom and Faith are in a partnership sharing profits and losses in the ratio of ?35 for Tom and ?25 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:
\table[[Tom,14,000],[Faith,10,000]]
Current accounts:
\table[[Tom,4,000],[Faith,2,500]]
Drawings:
\table[[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.
(Include your answer in the textbook or attach a workbook)
image text in transcribed

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

Students also viewed these Accounting questions