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(Subjective) (Capital & Current Accounts, Profit And Loss Appropriation Account.) Chong...

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Accounting

(Subjective)
(Capital & Current Accounts, Profit And Loss Appropriation Account.)
Chong and Loh were in partnership trading sharing profits and losses in the ratio 3:2
respectively. They agreed to allow interest on capitals at 5% per annum and to charge interest
on drawings at a rate of 10% per annum. Chong was the partnership's manager and for his
services he was credited with a salary of RM4,000 per annum. Chong had guaranteed Loh a
minimum annual income of RM3,000, after sharing partnership profits and before deducting
interest on drawings.
During the year ended 30 April 1988, the net profit of the partnership trading was RM 10,000
and the partners' drawings were:
Chong
RM 500
Loh
RM 900
On 31 December 1987 Chong withdrew RM1,200 from his Capital Account and Loh put in a
similar amount to his Capital Account.
The following were the balances of the partners' accounts at 1 May 1987:
Capital Accounts Current Accounts
Chong
RM6,000(Cr)
RM470(Cr)
5660
Loh
RM3,600(Cr)
RM510(Cr)
3396,226
(1) the partnership's Profit And Loss Appropriation Account for the year ended 30 April
1988 ;
(2) the partners' Capital and Current Accounts as at 30 April 1988.
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