No. 4(a): Workings for preparation of the appropriation account of Benji and Nicka:
Calculation of interest on capital:
Calculation of interest on drawings:
Calculation of share of profit using ratio of 3:2:
Remaining profits = (56,200 + 300 + 215) – (16,000 +14,000 + 5,000) = $21,715
Preparation of the Appropriation Account of Benji and Nicka:
No. 4(b): Preparation of the Current Account of the partners for the year ended 31st December 2017:
No. 4(c): Calculation of the partnership’s return on investments for the year ended 31st December 2017:
Return on investment = ___Net Profits x 100 = 56,200 x 100 = 18.74%
Capital Employed (160,000 + 140,000)
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The author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor.