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Answer For Quiz 1 - Partnership Accounts

The profit for Ali and Baba's partnership needs to be adjusted to deduct interest on a loan. The revised profit is RM43,250. This amount is appropriated between the partners based on their profit sharing ratios, with Ali receiving 60% (RM20,058) and Baba receiving 40% (RM13,372). The current accounts are updated to reflect the partners' capital, drawings, interest on capital and drawings, salaries, and share of profit for the year ended December 31, 2016.

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32 views1 page

Answer For Quiz 1 - Partnership Accounts

The profit for Ali and Baba's partnership needs to be adjusted to deduct interest on a loan. The revised profit is RM43,250. This amount is appropriated between the partners based on their profit sharing ratios, with Ali receiving 60% (RM20,058) and Baba receiving 40% (RM13,372). The current accounts are updated to reflect the partners' capital, drawings, interest on capital and drawings, salaries, and share of profit for the year ended December 31, 2016.

Uploaded by

Arman Shah
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ANSWER FOR QUIZ 1 PARTNERSHIP ACCOUNTS

The profit needs to be adjusted to account for the loan interest of 9% x RM25,000 = RM2,250.
The revised profit for appropriation is RM45,500 RM2,250 = RM43 250.

Ali and Baba


Appropriation Account for the year ended 31 December 2016

RM RM
Revised profit 43 250
Add: Interest on drawings
Ali (15,000 x 4%) 600
Baba (22,000 x 4%) 880 1 480

Less: Interest on capital


Ali (35,000 x 5%) 1 750
Baba (21,000 x 5%) 1 050 (2,800)

Less: Salary
Baba (8 500)
33 430
Profit share
Ali (60%) 20058
Baba (40%) 13 372 33 430

CURRENT ACCOUNT
Ali Baba Ali Baba
RM RM RM RM

01/01/12 Balance b/d - 4 200 01/01/12 Balance b/d 2 500 -


31/12/12 Interest on 600 880 31/12/12 Interest on 2 080 1 560
drawings capital
31/12/12 Drawings 15 000 22 000 31/12/12 Salary - 8 500
31/12/12 Share of 20 058 13 372
profit
31/12/12 Balance c/d 9 038 - 31/12/12 Balance c/d - 3 648
24 638 27 080 24 638 27 080
01/01/13 Balance b/d 3 648 01/01/13 Balance b/d 9 038

Ali and Baba


Balance Sheet extract as at 31 December 2016

Financed by:
Capital Account: Ali 35,000
Baba 21,000 46,000

Current Account: Ali 9 038


Baba (3 648) (5,390)
40,610

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