how do i calculate this problem?
A and B are in partnership sharing profits and losses in the ratio 3:2 respectively. Profit for the year was $86,500. The partners’ capital and current account balance at the beginning of the year:
Current accounts – A 5,750 (credit) – B – 1,200 (credit)
Capital accounts – A – 10,000 (credit) – B – 8,000 (credit)
A’s drawing during the year were $4,300, and B’s were $2,430, A’s and B’s current account balance at the end of the year:
A shopkeeper used 900gmw and earn 20% profit on it. then what is the total %profit earn.
To calculate A and B's current account balances at the end of the year, we need to follow a few steps:
1. Calculate the total profit sharing ratio by adding the ratio numbers: 3 + 2 = 5.
2. Calculate A's share of the profit by multiplying the total profit by A's ratio: (3/5) * $86,500 = $51,900.
3. Calculate B's share of the profit by multiplying the total profit by B's ratio: (2/5) * $86,500 = $34,600.
4. Adjust A and B's capital accounts:
- Add A's share of the profit to A's capital account: $10,000 + $51,900 = $61,900.
- Add B's share of the profit to B's capital account: $8,000 + $34,600 = $42,600.
5. Adjust A and B's current accounts:
- Subtract A's drawings from A's current account balance at the beginning of the year: $5,750 - $4,300 = $1,450.
- Subtract B's drawings from B's current account balance at the beginning of the year: -$1,200 - $2,430 = -$3,630.
6. Calculate A's current account balance at the end of the year:
- Add A's adjusted capital account balance to A's adjusted current account balance: $61,900 + $1,450 = $63,350.
7. Calculate B's current account balance at the end of the year:
- Add B's adjusted capital account balance to B's adjusted current account balance: $42,600 - $3,630 = $38,970.
Therefore, A's current account balance at the end of the year is $63,350 (credit) and B's current account balance at the end of the year is $38,970 (credit).