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Ken Garrett.
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chrismchale
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Hi I am having trouble trying to figure out this question. It is taken from an online mock test
17. Michael and Donald have been in partnership for several years, sharing profits and losses in the ratio 3 : 4. At 1 January they had the following credit balances on their capital and current accounts.
Capital Current
Michael $65,000 $11,486
Donald $80,000 $9,637The partnership statement of profit or loss for the year to 31 December shows a net profit of $28,595 and the partners have made drawings of $16,500 each. What is the balance on Michael’s current account at 31 December?
Can you help me with this?
I have tried to figure it out but no hope.Thank you
ChrisKen Garrett
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Michael’s starts with 11,486 (presumably Cr)
From this, subtract drawings of 16,500 and add his share of profits 3/7 x 28,595
So 11,486 – 16,500 + 12,255 = 7,241.
chrismchale
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