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SG1 1

The document shows the distribution of profit for a partnership between Bob and Bubbly. It shows: 1) The partnership had a net profit of Rs. 525,000 for the year. 2) Interest on capital and partner salaries were deducted from the profit, leaving Rs. 197,400 to be distributed. 3) The remaining profit was distributed to the partners based on their profit sharing ratios, with Bob receiving 4/5 of the amount (Rs. 157,920) and Bubbly receiving 1/5 (Rs. 39,480).

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36 views3 pages

SG1 1

The document shows the distribution of profit for a partnership between Bob and Bubbly. It shows: 1) The partnership had a net profit of Rs. 525,000 for the year. 2) Interest on capital and partner salaries were deducted from the profit, leaving Rs. 197,400 to be distributed. 3) The remaining profit was distributed to the partners based on their profit sharing ratios, with Bob receiving 4/5 of the amount (Rs. 157,920) and Bubbly receiving 1/5 (Rs. 39,480).

Uploaded by

snfrcbkb88
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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SG 1.

a) Dr Cr
Interest on Capital: Bob(180000 x 12%) 21,600 Interest on Capital 39,600
Interest on Capital: Bubbly (150000 x 12%) 18,000 or Current account: Bob 21,600
Current account: Bob 21,600 Current account: Bubbly 18,000
Current account: Bubbly 18,000
Salary: Bob (8000 pm x 12) 96,000 Salaries: Partners 288,000
Salary: Bubbly (16000 pm x 12) 192,000 Current account: Bob 96,000
Current account: Bob 96,000 or Current account: Bubbly 192,000
Current account: Bubbly 192,000

b)

Net Profit 525,000

Interest on Capital: Bob -21,600


Interest on Capital: Bubbly -18,000
Salary: Bob -192,000
Salary: Bubbly -96,000
Remainder of profit 197,400
Profit share: Bob (197400 x 4/5) 157,920
Profit Share: Bubbly (197400 x 1/5) 39,480

c)
Closing Entries
Distribution/Appropriation account 327,600
Interest on capital 39,600
Salaries of partners 288,000
Distribution/Appropriation account 197,400
Current account: Bob 157,920
Current account: Bubbly 39,480
General ledger (not required)

Capital
Bob Bubbly

Current accounts
Bob Bubbly

Distribution account
Interest on capital 39,600
Salaries partners 288,000
Current account Bob (525000-39600-288000)4/5 157,920
Current account Bubbly (525000-39600-288000)1/5 39,480

Salaries partners
Current account Bob (12x8000) 96,000
Current account Bubbly (12x16000) 192,000

Interest on capital
Current account Bob (12%x1800000) 21,600
Current account Bubbly (12%x150000) 18,000
Capital
Bob Bubbly
Balance 180,000 150,000

rrent accounts
Bob Bubbly
Interest on capital 21,600 18,000
Salaries 96,000 192,000
Distribution account 157,920 39,480

ribution account
Profit or Loss 525,000

laries partners
Distribution account 288,000

erest on capital
Distribution account 39,600

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