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Question: On 1st January 1995, Mutinda and Gathie entered into a partnership contributing sh. 20000 and sh. 15000 respectively. They share capitals in the ratio of 3:2 Gathie is allowed a salary of sh. 4000 per annum. Interest on capitals is to be allowed at 5% per annum. Interest and drawings is to be charged at 5% per annum. During the year Mutinda withdrew sh. 3000 and Gathie sh. 6000 interest being sh. 70 and sh. 50 respectively. Profit in 1998 before the above mentioned adjustments amounted to sh. 10580. Show how the profit is to be distributed. Also show the capital accounts of Mutinda and Gathie.
If they are fluctuating
If they are fixed.
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