INSTRUCTION: TO BE SUBMITTED TO CLASS PRESIDENT ON OR BEFORE THURSDAY 18TH JULY, 2019 BEFORE 5PM PROMPT.
1. (a) Define partnership and state the contents of
partnership deed.
(b) In
the absence of an agreement by the partners, Section 24 of the Partnership Act
1890 shall apply. State the provisions.
2. Peter and Paul formed a partnership on 1st January,
2018. The partnership agreement contains the following:
i. The partners fixed capital are Peter N24,000 and
Paul N30,000.
ii. Paul to receive a salary of N1,800 per year.
iii. Interest on capital to be calculated at 5% per
annum.
iv. Interest is to be charged on drawing at the rate
of 2%.
v. Peter and
Paul to share profit in ratio 3:2 respectively.
During the year to 31st December 2018, drawings were
Peter N2,250 , Paul N1,750 and the net profit was N13,500. The partners decided
to maintain fixed capital account.
You are required to show:
(a)
The
Profit and Loss Appropriation Account for the year ended 31st December 2018.
(b)
The
partners Current Account
(c)
Statement
of Financial Position ( Extract ) as at 31st December 2018
