IGCSE Accounting Paper-1: Specimen Questions with Answers 315 - 316 of 338

Passage

Sara and Zara are in partnership. The partnership agreement states the following-

That

  • The interest on capital is paid at the rate of 12 % per annum.
  • The profits and losses are to be shared in the ratio of 7: 3 respectively
  • Zara is to receive salary of $ 400pm

The following information is available

Sara and Zara Are in Partnership
On 1 April 2018$
Capital Accounts-

Sara

Zara

40000

15000

Current Accounts-

Sara

Zara

4500 Credit

3000 Debit

For the year ended 31 March 2019

Profit for the year

Drawings-

Sara

Zara

25000

5000

3500

On 1 April 2018 $

Capital Accounts

Sara 40000

Zara 15000

Current Accounts

Sara 4500 Credit

Zara 3000 Debit

For the year ended 31 March 2019

Profit for the year 25000

Drawings-

Sara 5000

Zara 3500

On 1 January 2019 Sara introduced additional capital of $ 8000 into the partnership in the form of cash.

Question 315 (3 of 4 Based on Passage)

Write in Short

Short Answer▾

Prepare the P&L Appropriation Account of the firm for the year ended 31 March 2019 (Marks 5)

Sara and Zara

P & L Appropriation a/C for the Year Ended 31 March 2019

P&L Appropriation a/C for the Year Ended 31 March 2019
Details$Details$

Explanation

Sara and Zara

P & L Appropriation a/C for the Year Ended 31 March 2019

P&L Appropriation a/C for the Year Ended 31 March 2019
Details$Details$
Interest on Capital (I) :Net Profit25000
Sara- $ 5040
Zara- $ 18006840
Zara՚s Salary (II)4800
Share of profit (III) :
Sara- $ 9352
Zara- $ 400813360
2500025000

Working Notes-

Interest on Capital-
Interest on Capital-$
Sara-

4800

240

5040

Zara-1800

(I) Interest on Capital- $

Sara- 4800

240

5040

Zara- 1800

(II) Zara՚s Salary-

(III) Divisible Profits

Zara՚s Share

Sara՚s Share

Question 316 (4 of 4 Based on Passage)

Question

MCQ▾

In the absence of any agreement regarding the same, specify the rules relating to the following:

(Marks 4)

Choices

Choice (4)

a.

Salary to a Partner

b.

Sharing of Profits & Losses

c.

Interest on Partners Drawings

d.

Interest on partners capital

Answer

c.

Explanation

  • Sharing of Profits & Losses- In the absence of any agreement on profit sharing ratio, profit will be shared equally.
  • Interest on Partners Capital- In the absence of agreement for interest on capital, Interest on Partners capital will not be given.
  • Interest on Partners Drawings- Interest on Drawings will not be charged
  • Salary to a Partner- In the absence of prior agreement, no partner will be entitled for getting any salary for his work even if the other is non-working.

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