The partners’ totals must add up to the net profit. When they do not, the size of the difference often matches the missing item.
This lesson closes the partnership worked set. It checks the figures made in interest on drawings.
What does the check look like when it passes?
For Hafiz and Jia Wen, the correct working is below.
| Line | Hafiz (RM) | Jia Wen (RM) |
|---|---|---|
| Interest on capital | 5 000 | 3 000 |
| Salary | 14 400 | |
| Interest on drawings | (780) | (270) |
| Residual share (3:2 of 62 650) | 37 590 | 25 060 |
| Total share | 41 810 | 42 190 |
The residual is 84 000 + 1 050 − 8 000 − 14 400 = RM62 650. Since 62 650 ÷ 5 = 12 530, Hafiz gets 37 590 and Jia Wen gets 25 060. Together, the totals are 41 810 + 42 190 = RM84 000, which matches the net profit.
Worked example: a check that fails
A student forgets to add the interest on drawings. The residual becomes 84 000 − 8 000 − 14 400 = RM61 600, and 61 600 ÷ 5 = 12 320.
- Hafiz: 5 000 − 780 + 3 × 12 320 = 5 000 − 780 + 36 960 = RM41 180
- Jia Wen: 3 000 + 14 400 − 270 + 2 × 12 320 = 3 000 + 14 400 − 270 + 24 640 = RM41 770
The total is 41 180 + 41 770 = RM82 950. That is RM1 050 short of RM84 000, and RM1 050 is exactly the interest on drawings (780 + 270). The shortfall names the omitted item.
The mistake that costs marks
One slip is to skip the check because each line “looks right”. A missing item of this kind changes every figure that follows, including both current accounts.
| Step | Wrong | Right |
|---|---|---|
| Interest on drawings | Left out of the profit | Added to the net profit |
| Residual | 61 600 | 62 650 |
| Sum of partners’ totals | 82 950 | 84 000 |
What the check cannot catch
If you omit an item on both sides, for example by leaving out Jia Wen’s salary from both the deduction and her credit, the totals still add up to RM84 000. The check also cannot catch a wrong ratio applied consistently.
So a matching total does not prove every line is right. Read each line back against the agreement as well.
Check yourself
Net profit is RM54 000. Interest on capital is X RM1 500 and Y RM1 500. Y has a salary of RM2 500.
The ratio is 1:1. A student gets X RM25 750 and Y RM25 750. Find the error and the correct figures.
Answer
The total is 25 750 + 25 750 = RM51 500, which is RM2 500 short.
RM2 500 is Y’s salary. The residual was 54 000 − 3 000 − 2 500 = RM48 500, so each residual share is 24 250, and the student deducted the salary but never credited it to Y.
Correct: X = 1 500 + 24 250 = RM25 750. Y = 1 500 + 2 500 + 24 250 = RM28 250. Check: 25 750 + 28 250 = RM54 000.
What to study next
Try the full set on the worked set practice questions. The cash profit transaction timeline shows how profit differs from cash for the same year.
If you want a teacher to check your reconciliation, see online one-to-one Accounting tuition.