2nd year test Distribution of profit or loss


Muzammil collegiate
LA54 block 15 gulshan e Mustafa Karachi

Distribution of Profit or Loss

Jamal and Swaleh are partners having capitals of Rs.900,000 and Rs.600,000 respectively. They
had agreed to the following terms:
(i)Jamal and Swaleh will be entitled to a monthly salary of Rs.6,000 and Rs.3,000
respectively.(ii) Swaleh will be allowed the commission of Rs.30,000 per year.
(iii) The remaining profit and loss will be divided between the partners in the ratio of their capitals. Net loss of the firm during the year is Rs.10,000.
REQUIRED
(i)Prepare Income Distribution Summary. (ii) Give necessary entry (entries) in General Journal regarding distribution of the net loss of the firm among partners.

Q2)Ansar, Azam and Azeem are partners having capitals of Rs.60,000; Rs.50,000 and Rs.50,000 respectively. They had agreed to the following terms:
(i)Azam and Azeem shall be entitled to a monthly salary of Rs.1,200 and Rs.1,500 respectively.
(ii) Ansar shall be allowed commission Rs.2,500 per year.Partnership – Distribution of Profit or Loss
(iii) The remaining profit or loss shall be divided among the partners in the ration of their beginning capitals.
REQUIRED
(a)Prepare table showing the distribution of profit/loss among the partners as per above
terms under each of the following assumptions:-
(i)If the firm earns net income of Rs.60,000 during the year.
(ii) In the firm sustains net loss of Rs.20,000 during the year.
(b) Prepare profit & loss appropriation account under each of the above assumptions separately.

(c)Give the necessary entries in the General Journal under each of the above assumptions separately

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