02-09-2010, 07:22 AM
there were 3 partners A,B and C carrying business on july 1 2008 C due to heavy losses in his personal business requested to settle his accounts but at the same time A and B agreed to convert partnership into company.salaries of 300 thousand had been credited to each partners capital account while recording the profit at the year end june 30 2007.on insistence of C,it was agreed that based on the amount of efforts put in by A and B,the salaries allowed to them should be reduced by 30% .
what will be its treatment i found the following solution but i am not satisfied please somebody explain it
capital A 90(Dr)
capital B 90(Dr)
profit to be distributed 180(Cr)
profit 180 (Dr) (532)
capital A 90(Cr)
capital B 54(Cr)
capital C 36(Cr)
what will be its treatment i found the following solution but i am not satisfied please somebody explain it
capital A 90(Dr)
capital B 90(Dr)
profit to be distributed 180(Cr)
profit 180 (Dr) (532)
capital A 90(Cr)
capital B 54(Cr)
capital C 36(Cr)
