All Respected members,
Please educate me what would be a profit distribution journal entry when a firm has a 2 partners of firm.
Further, where this distribution will exist; Income statement or Balance sheet ?
Thanks in advance for your precious time and efforts to reply this query.
Dear Raja PM,
Thanks for your reply.
Dear Mr. Parsad Nilugal,
Thanks a lot to give detailed reply.
Please let me know that net profit from p&l can directly transfer to partners account by journal entry or we have to prepare 1st profit appropriation account and then transfer profit from that account?
Further, if we prepare profit appropriation account what would be journal entry of it ?
We have prepare profit & Loss Appropriation and profit distribution . as follows .
Profit and Loss Appropriation A/c Dr
To Net profit of X A/c Cr
To Net profit of Y A/c Cr
( profit distributed among the partners )
In first reply - Net profit transfer entry .
Profits for shareholders and owner
Appropriation doesnt distribute profits but normal profit and loss does. I have attached acca global for your convenience. You can follow this format and use AS standards for everything. Use company acts ratios if you suspect that your ratios will be hindered. I still think ratios can be impacted so contact someone to find out the truth
CAclubindia
