Partnership

What is a partnership?

• A business owned by more than 50 people

• A business owned by one person

• A business owned by two or more people (less than 20)

• A business owned by exactly 2 people

The net profit after appropriation of Partners A, B, C and D is $20,000. They share their profits equally. How much will C receive?

(a)  

What happens if there is NO partnership agreement?

• Partnership will cease to exist

• Partnership Act will be implemented

• Partnership becomes a Sole Trader

• Nothing will happen

Partnership Act states that if there is no Partnership Agreement, partners will share their profit or losses (a)  

Is there an interest on capital or interest on drawing in the Partnership Act?

• Yep, 5% each!

• 5% for interest on capital, 3% for interest on drawings

• 3% for interest on capital,

  5% for interest on drawings

• No interest for both!

Mark where interest on drawings will be in the current account (Mark X on the correct side)

Mark where share of profit will be in the current account (Mark an X on the correct side)

If Partners A and B share their profit in the ratio of 3:2, how much is the share of profit for both partners?

At the end of the financial year (31 December 2020), the following is the information of Partners Q and I's withdrawal of cash for personal use :

Q withdrew $36,000 on 1 July 2020.

I withdrew $18,000 on 1 December 2020.

The partners agree to charge an interest of drawings of 5% per annum. What is the TOTAL interest charged to each partner?

Which of the following is an ADVANTAGE of being in a Partnership?

• Share of profits

• Unlimited Liability

• Decisions affecting the business can be made efficiently

• Joint responsibility