Answer To Accounting Test Question No. P1 On Partnership’s Profit & Loss Appropriation

October 14th, 2008 Comments off
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Answer Paper to Accounting Test Question No.P 1 on Partnership’s Profit & Loss Appropriation

Jim & John

Profit & Loss Appropriation for the year ended 31 December Year 2007

$

$

Net Profit b/d

90,000

Interest on capital:

Jim: 6% x $40,000=$2,400

John:6% x $30,000=$1,800

4,200

Interest on drawings:

Jim: 6% x $30,000=$1,800

John:6% x $20,000=$1,200

3,000

Jim’s Salary

40,000

Profit Sharing:

Jim: 1/2 x $48,800=$24,400

John:1/2 x $48,800=$24,400

48,800

93,000

93,000

Current Account

Jim

John

Jim

John

$

$

$

$

Dec 31 2007

Jan1 2007

Balance b/f

60,000

50,000

Drawings

30,000

20,000

Dec 31 Interest on Capital:

2,400

1,800

Interest on drawing

1,800

1,200

Salary

40,000

Balance c/d

95,000

55,000

Profit

24,400

24,400

126,800

76,200

126,800

76,200

Capital Account

Jim

John

Jim

John

$

$

$

$

Dec 31 2007

Balance c/d

40,000

30,000

Jan1 2007

Balance b/f

40,000

30,000

40,000

30,000

40,000

30,000

Balance Sheet As At 31 December 2007

$

Capital:

Jim

40,000

John

30,000

70,000

Current:

Jim

95,000

John

55,000

150,000

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