Question

1. Kunal and Saurabh are equal partners. On 1st Jan. 2017 their capitals were 20,000 and
16,000 respectively. Interest on capital is to be allowed 10% p.a. from profit prior to
division thereof, the net profit for the year ending 31st Dec. 2017 before allowing interest
on capital amounted to ? 9,800. Pass Journal entries and prepare Profit and Loss Appro-
priation Account​

Answer 1

Answer:

Dr

to interest on capital=3600

kunal-2000

saurabh-1600

to partner to transferred

kunal- 3100

saurabh-3100

6200

Cr.

By profit- 9800