Question

Question No: 1 10 Marks
Maria, Marwa and Muna started a partnership firm on January 1, 2019. They contributed RO 24,000, RO 36,000 and RO 48,000 respectively as their capitals and decided to share profits in the ratio of 2:2:3. The partnership deed provided that Maria is to be paid salary of RO 8,000 p.a. and Marwa is to be paid a commission of RO 2,000 for every six months. It also provided that interest on capital be allowed @ 8% p.a. The drawings for the year were: Maria RO 2,400, Marwa RO 3,600 and Muna RO 4,800. Interest on drawings was RO 120 for Maria, RO 80 for Marwa and RO 180 for Muna. The net amount of profit as per the profit and loss account for the year ended 2019 was RO 28,480. Required: Prepare the necessary journal entries relating to Profit and Loss Appropriation.   

Answer 1