The partnership deed of Dustin, Daniel and Dylan, partners trading as Triple D Traders, includes the following
Question:
The partnership deed of Dustin, Daniel and Dylan, partners trading as Triple D Traders, includes the following provisions.
1. Salaries are to be allowed: Dustin, $35 000; Daniel, $30 000; Dylan, $25 000.
2. Dylan is to receive a bonus of 20% of the profits after allowing for partners’ salaries and interest.
3. Interest is to be allowed on advances by partners at 6% p.a.
4. Interest on drawings to be charged at 8% p.a.
5. Residual profits are to be divided: Dustin, 3/8; Daniel, 3/8; Dylan, 1/4.
Account balances at 30 June 2015 before any adjustment in respect of provisions (1) to (5) include the following:
Capital: Dustin Daniel Dylan Retained earnings: Dustin Daniel Dylan Advances: Daniel (on 1 July 2014) Dylan (on 1 July 2014) Drawings: Dustin (on 1 March 2015) Daniel (on 1 January 2015) Dylan (on 1 October 2014) Profit or Loss Summary (profit for the year ended 30 June 2015) | $ | 160 000 80 000 200 000 32 000 31 200 50 600 72 000 40 000 12 600 7 900 5 900 203 000 |
Required
Prepare a schedule showing the distribution of final profit to each partner.
DistributionThe word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett