CBSE BOARD X, asked by munnikeshari73, 9 months ago

0.33. Kavita and Leela are partners with capitals of 36,00,000 and 34,00,000 and
sharing profits & losses in the ratio of 2 : 1. Their partnership deed provides that
interest on capitals shall be provided @8% p.a., and it is to be treated as a charge
against profits. Prepare relevant account to allocate the profit in the following
alternative cases :
(1) If profit for the year is 31,10,000
(i) If profit for the year is 35,000
(ui) Ifloss for the year is 10,000​

Answers

Answered by premchandch35
0

1. PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars Amount Particulars Amount

To interest on capital

A=30,000*4/6=20000

B=30,000*2/6=10,000 30,000 By net profit 30,000

Total 30,000 Total 30,000

When partnership deed is silent regarding interest as a charge or appropriation.

As the total amount of interest is more than the available profit,the interest should be allowed in the ratio of capital i.e 4:2

Interest on capital

A=4,00,000*6%=24,000

B=2,00,000*6%=12000

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars Amount Particulars Amount

To Interest on capital

A= 4,00,000*6%=24000

B=2,00,000*6%=12000 36,000 By net profit

By loss transferred A/c

A=2400

B=3600 30,000

Total 36,000 Total 36,000

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