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a b and c entered into partnership with no agreement as to sharing profits and contributed rupees 100000 , rupees 80000and 70000 respectively as capital .c advance a loan of rupees 50000to the state the firm
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a b and c entered into partnership with no agreement as to sharing pr...
Introduction:
Partnership firm is a type of business organization where two or more people come together to carry on a business for profit. In such a firm, the partners contribute capital, share profits and losses, and manage the business collectively.
Accounting for Partnership Firms:
Fundamentals of accounting for partnership firms include the following:
1. Capital Accounts:
Partnership firms maintain separate capital accounts for each partner. The capital account records the amount of capital contributed by each partner, any additional capital introduced, and the share of profits or losses.
In the given scenario, A, B, and C contributed Rs. 100000, Rs. 80000, and Rs. 70000 respectively as capital.
2. Profit and Loss Sharing:
Partnership firms share profits and losses among the partners based on an agreement. In the absence of an agreement, profits and losses are shared equally.
In the given scenario, there is no agreement as to sharing profits. Therefore, profits and losses will be shared equally among A, B, and C.
3. Loan Accounts:
Partnership firms may also have loan accounts. A loan account records the amount of money loaned by a partner to the firm.
In the given scenario, C advanced a loan of Rs. 50000 to the firm.
4. Interest on Loan:
Partnership firms may pay interest on the loan taken from partners. The rate of interest and the terms of repayment are decided based on an agreement.
In the given scenario, there is no information about the interest rate or the terms of repayment.
Conclusion:
Accounting for partnership firms involves maintaining separate capital accounts, sharing profits and losses, and keeping track of loan accounts. It is important to have a clear agreement among partners regarding these aspects to avoid any disputes in the future.
Partnership firm is a type of business organization where two or more people come together to carry on a business for profit. In such a firm, the partners contribute capital, share profits and losses, and manage the business collectively.
Accounting for Partnership Firms:
Fundamentals of accounting for partnership firms include the following:
1. Capital Accounts:
Partnership firms maintain separate capital accounts for each partner. The capital account records the amount of capital contributed by each partner, any additional capital introduced, and the share of profits or losses.
In the given scenario, A, B, and C contributed Rs. 100000, Rs. 80000, and Rs. 70000 respectively as capital.
2. Profit and Loss Sharing:
Partnership firms share profits and losses among the partners based on an agreement. In the absence of an agreement, profits and losses are shared equally.
In the given scenario, there is no agreement as to sharing profits. Therefore, profits and losses will be shared equally among A, B, and C.
3. Loan Accounts:
Partnership firms may also have loan accounts. A loan account records the amount of money loaned by a partner to the firm.
In the given scenario, C advanced a loan of Rs. 50000 to the firm.
4. Interest on Loan:
Partnership firms may pay interest on the loan taken from partners. The rate of interest and the terms of repayment are decided based on an agreement.
In the given scenario, there is no information about the interest rate or the terms of repayment.
Conclusion:
Accounting for partnership firms involves maintaining separate capital accounts, sharing profits and losses, and keeping track of loan accounts. It is important to have a clear agreement among partners regarding these aspects to avoid any disputes in the future.
Community Answer
a b and c entered into partnership with no agreement as to sharing pr...
So at the end of the accounting period it have provide interest 6%pa and then after the share profit in equal proportions
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a b and c entered into partnership with no agreement as to sharing profits and contributed rupees 100000 , rupees 80000and 70000 respectively as capital .c advance a loan of rupees 50000to the state the firm Related: Key Notes - Accounting for partnership firms: Fundamentals?
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