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A, B and C are in partnership selling DVDs.
They haven’t been very successful in the past year and in the year ended 30 June 20X9, recorded a loss of $120,000 Their partnership agreement states the following:
• interest on capital to be provided at 4% per annum
• C to be allocated a salary of $25,000, and B $14,000
• no interest to be charged on drawings
• balance of profits to be shared in the ratio 4:3:1.
Capital balances at the start of the year stood as follows:
How much profit or loss is allocated to C?
Partnership accounting is not in the syllabus for Paper FA (or for any of the ACCA exams).
It was removed from the syllabus well over 10 years ago!