In terms of the partnership agreement, partners Henry and Peter are entitled to salaries of R10 000 per month and R12 000 per month respectively from 01 March 2012 (the beginning of the financial year) to 31 May 2022: The salaries were increased by 10% with effect from 01 June 2022. How much will be reflected as partners' salaries for the financial year ended 28 February 2023? A. R290 400 OB. R264 000 O C. R270 600 OD. R283 800 Previous page
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- The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.
- Additional information1. The net profit according to the Profit and Loss account amounted to R500 000 on 28February 2021.2. The partnership agreement made provision for the following:1. Interest on capital must be provided at 15% per annum on the balances in the capitalAccounts from 1 March 2020 to 31 August 2020. With effect from 1 September 2019 the interest rate on capital increases to 18% per annum.2. The partners are entitled to the following monthly salaries: Bobby R11 000Vincent R10 0003. Bobby is entitled to a bonus of 15% of the net profit before any appropriations are made.4. Bobby and Vincent share the remaining profits or losses in the ratio 3:2 respectively.A and B formed a partnership on February 28, 2022 by contributing P430,000 and P570,000, respectively. The operations of the partnership for 2022 resulted to a profit of P375,000. Partners A and B agreed to the following allocation scheme: a. Weekly salary allowance of P1,000 is to be given to Partner A; b. 5% interest is to be credited to the partners; c. Bonus of 10% based on profit after salaries and interest to B. d. Residual income is to be allocated equally. How should the profit be allocated to A and B, respectively?8. The partnership contract for Malicdem and Nabua Partnership provided that Malicdem is to receive an annual salary of P426,000, Nabua is to receive an annual salary of P284,000, and the remaining profit or loss is to be divided equally between the two partners. Net income of the Malicdem oupe and Nabua partnership for the year ended December 31, 2020 was P639,000. The closing entry for the net income on December 31, 2020 is a debit to Income Summary for P639,000 and credits to Malicdem Capital and Nabua Capital, respectively of ay! outin anc Duning 2,400 a. P383,400 and P255,600 b. P319,500 and P319,500 C. P426,000 and P284,000 d. P390,500 and P248,500 capite
- David and Isac are in partnership, sharing profits 3:2. On 1 July 2020 Casey joins the partnership. Under the new partnership agreement profits will be shared by David, Isac, and Casey 5:3:2 respectively with the following annual salaries. Isac £30,000 pa Casey £38,000 pa Profit accrues evenly over the year. The partnership profit for the year at 31 Dec 2020 was £450,000. What was the allocated profit as 31 Dec 2020 for David, Isac, and Casey?The terms of a partnership agreement provide that one of the partners is to receive a salary allowance of P30,000, plus a bonus of 20 percent of income after deduction of the bonus and the salary allowance. If income is P150,000, the bonus should be: P18,000P20,000P24,000P30,000Emily, Daniel and Victoria have capital balances of P120,000, P200,000 and P72,000, respectively and they share profits in the respective ratio of 4:2:1. Daniel received P104,000 as a result of the liquidation of the partnership. Loss on asset realization isP 236,000P 336,000P 288,000P 264,000John, Lee and Tony are in partnership, preparing accounts to 31 October each year.Their partnership agreement states that:(i) The partners are entitled to 5% per annum interest on their opening capitalaccounts. No interest is allowed (or charged) on current account balances.(ii) Interest is charged on the partners' drawings at 7% per annum. Their drawingsduring the year to 31 October 2020 were as follows:John RM30,000Lee RM20,000Tony RM3,000(iii) Partners' annual salaries are RM6,000 and RM 12,000 for Lee and Tonyrespectively.(iv) Remaining profits and losses are shared between John, Lee and Tony in the ratioof 5:4:1.…5/-5(v) The partners' capital and current account balances as at 1 November 2019 are asfollows:Capital a/c Current a/cRM RMJohn 50,000 16,320 CrLee 30,000 1,110 CrTony 10,000 (590) DrThe capital account balances remained unchanged during the year to 31 October2020.(vi) The partnership's net profit for the year to 31 October 2020 is RM81,961.Required:a. Prepare a profit…
- John, Lee and Tony are in partnership, preparing accounts to 31 October each year.Their partnership agreement states that:(i) The partners are entitled to 5% per annum interest on their opening capitalaccounts. No interest is allowed (or charged) on current account balances.(ii) Interest is charged on the partners' drawings at 7% per annum. Their drawingsduring the year to 31 October 2020 were as follows:John RM30,000Lee RM20,000Tony RM3,000(iii) Partners' annual salaries are RM6,000 and RM 12,000 for Lee and Tonyrespectively.(iv) Remaining profits and losses are shared between John, Lee and Tony in the ratioof 5:4:1.…5/-5(v) The partners' capital and current account balances as at 1 November 2019 are asfollows:Capital a/c Current a/cRM RMJohn 50,000 16,320 CrLee 30,000 1,110 CrTony 10,000 (590) DrThe capital account balances remained unchanged during the year to 31 October2020.(vi) The partnership's net profit for the year to 31 October 2020 is RM81,961. Required:a. Prepare a profit…A B and C are in partnership sharing profits and losses in the ratio of 3:2:1. On 1st Jan 2019, their capital balances are: A 30,000 B 20,000 C 10,000 The terms of partnership provides that All partners are eligible for interest on capital @6% All partners are liable to pay interest on drawings @ 4% All Partners are eligible for salary @ RO 200 per month The net profit for the year ended 31st Dec 2019 before making the above terms was 18,000. The drawings of the partners were: A 3,000 B 2,000 C 1,000 You are requested to prepare Profit and Loss Appropriations Account Capital accounts of three partners under fluctuating capital method1. (a) The partnership of Fatimah and Anisa commenced on 1 January 2020 and accounts are prepared to 31 December annually. Their partnership recorded a profit before appropriation of RM60,000. The partnership agreement provided for the following: Interest on capital and drawings 3% per annum for each partner Fatimah's drawings RM4,200 Anisa's drawings RM1,400 Fatimah's capital contribution RM14,000 Anisa's capital contribution RM7,000 Salary: Fatimah Share on divisible income / (loss): Fatimah Anisa RM28,000 2/3 1/3 Required: Prepare a profit and loss appropriation account. (b) How does the tax treatment apply to the partnership?