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Shahid and Kareena are in partnership, sharing profits in the ratio of 1:2, after charging salaries of $6,000 each partner in each accounting year. On 1 July 2013, they agreed to change the profit-sharing ratio to 1:1 and to increase each partner’s salary to $9,000 per year. For the year ended 31 December 2013, the partnership profit amounted to $240,000. Profits are made evenly throughout the year. What are the partner’s total share of profit to be posted their respective current accounts for the year ended 31 December 2013?
Please help me solve. I am not acknowledged about answer too
1st 6 months old regime; 2nd 6 months new.
Profit 120,000 per 6 months
1st 6 months: S 3000 salary and K 3,000 salary. Profits remaining to be shared = 114,000.
1/3 x 114,000 to S and 2/3 x 114,000 to K
2nd 6 months: S 4,500 salary and K 4,500 salary. Profits remaining to be shared = 111,000
1/2 x 111,000 to S and 1/2 x 111,000 to K
Add each partners salary and profit share to get total amounts to be credited to their current accounts.
Thank You sir. I did the same but you have calculated salary of 3000 in first half and 4500 in second half which gave full salary of 7500 per partner per annum.
I charged 3000 in first half and 6000 in second half. So it made 9000 per partner per annum.
So did I did incorrect?No. That’s not right. I don’t see why you charged 6,000 in the second half. Annual salary was then at the rate of $9,000, so for 6 months the amount is 4,500.
Thanks a lot sir.
I charged as I have to make annual salary total of 9000.
In first half, I charged 3000 whereas in second half as 6000 which makes 9000 in total.
Otherwise, profit of 240000 will only apportion salary of 3000 in first half and 4500 in second half which is equal to total salary of 7500 annual salary.
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