about partnership profit and lose dividend share

1. DIVISION OF PROFIT & LOSS
AMONG THE PARTNER
PREPAREDBYS.FARHANALISHAH
M.COM2ND
PRESENTING TO MISSRABIA
BYFARHAN,WALEED&MEHRAN

2. Partnership
When (2 to 20) partner start business is called
partnership in any other business.
in banking (2 to 10) partners.
They all will agree on the deeds of partnership.
They will decide the ratio of profit &loss by the
investment of capital or by the documents of
agreement.
One of the partner can get salary on his services
to the business.
Other will get profit Or commission.

3. Profit and loss distribution
If the capital investment is equal so the
P&L will be share equal.
If capital investment is change like (A
invest 20,000) (B invest 30,000) & (C
invest 40,000).
Then there will be a ratio of 1:2:3 that A
will take 1/6, B will 2/6 and C will 3/6 or
as in the agreement.

4. EXAMPLE
• If there is AB&C are partners and invest 20,000, 30,000,
and 40,000, of capital in the business.
• net profit of 2,000,00 the interest rate of 6%PA. they also
made some drawings on which interest is charged A 400,
B 500, C 300.
• A is in titled to get salary of 2000 P.M. B will take 5% of
net profit after all the adjustment as commission.
• 10% of the profit remaining before the commission is to
be transfer to general reserve.
• Profit will be shared among AB&C in the ratio 1:2:3.
• So we will make P&L appropriation account to show the
adjustments.

5. SOLUTION
PARTICULAR RS PARTICULAR RS
To interest on capital
A :20000*6/100=1200
B:30000*6/100=1800
C:40000*6/100=2400 5400
By net profit 200000
TO A salary 2000*12=24000 24000 By drawings
A: 400
B: 500
C: 300 1200
To general reserve 17180
To commission B 7731
To profit transfer
A:146889*1/6=24482
B:146889*2/6=48963
C:146889*3/6=73444 146889
Total 201200 Total 201200