Answered

Westonci.ca offers fast, accurate answers to your questions. Join our community and get the insights you need now. Experience the ease of finding quick and accurate answers to your questions from professionals on our platform. Our platform offers a seamless experience for finding reliable answers from a network of knowledgeable professionals.

Harry and Hanson were partners in a firm sharing profits and losses in the ratio 3:2. Their capital was $300,000 and $150,000 respectively and they were entitled to interest on capital of 25% per annum. At the end of the firm's financial year December 31, 2019, the firm earned profit of $180,000 after allowing for interest on capital. Given this information, the profits that will be distributed among the partners will be:

Sagot :

raniaatia1221

Answer:

JOURNAL

1. Cash a/c... Dr. 350000

To C's Capital a/c 200000

To Premium for Goodwill a/c 150000

(Being capital and premium for goodwill brought in by C)

2. Premium for Goodwill a/c... Dr. 150000

To A's Capital a/c 110000

To B's Capital a/c 40000

(Being premium for goodwill distributed among the partners in the ratio of 11:4)

3. A's Capital a/c.... Dr. 55000

B's Capital a/c.... Dr. 20000

To Cash a/c 75000

(Being half of the premium for goodwill withdrawn by the partners)

Calculation of sacrificing ratio:

A's sacrifice= 3/5- 2/7= 11/35

B's sacrifice= 2/5- 2/7= 4/35

Sacrificing ratio= 11:4

abiolataiwo2015

Based on the information given  the profits that will be distributed among the partners will be: Harry  $108,000; Hanson $72,000.

Given:

Profits and losses sharing ratio=3:2

Profit earned=$180,000

Hence:

Profit sharing

Harry Profit=3/(3+2)×$180,000

Harry Profit=3/5×$180,000

Harry Profit=$108,000

Hanson Profit=2/(3+2)×$180,000

Hanson Profit=2/5×$180,000

Hanson Profit=$72,000

Inconclusion the profits that will be distributed among the partners will be: Harry  $108,000; Hanson $72,000.

Learn more here: https://brainly.com/question/17237029

Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.