You have given the following information relating to a partnership of Tom and John. The partners profit
Question:
You have given the following information relating to a partnership of Tom and John.
The partner’s profit sharing ratio is 3:2. The partnership has recorded a profit of P65,460.
The following information also relates to the partnership:
Both partners received salaries: Tom P9,000 and John P5,000 The partners are receiving an interest 5% on their capital opening balances.
They will also be charged 8% as interest on drawings made.
Tom | John | |
Drawings | P18,000 | P31,000 |
Capital | P120,000 (Cr) | P80,000 (Cr) |
Current Account | P15,655 (Cr) | P4,137 (Dr) |
The following information relating to Tom and John’s drawings, as well as current account and capital balances was made available.
Required: Based on the information given above:
Prepare the Partnership Appropriation Account.
Draw up the partners’ current accounts.
Expert Answer:
Interest on Capital Tom 5 P120000 P6000 John 5 P80000 P4000 Interest on Drawings Tom 8 ... View the full answer
