Question

1. Nirmal and Pawan are partners sharing profits in the ratio of 3 : 2. The firm had given loan to Pawan of
5,00,000 on 1st April, 2020. Interest was to be charged @ 10% p.a. The firm took loan of 200,000 from Nirmal
on 1st October, 2020. Before giving effect to the above, the firm incurred a loss of 10,000 for the year
ended 31st March, 2021.
Determine the amount to be transferred to Profit and Loss Appropriation Account.
(Ans.: Amount of Profit transferred to Profit and Loss Appropriation A/c -- 34,000​

Answer 1

Answer:

Explanation:

Given:

Profit and loss sharing ratio = 3 : 2

Given amount of loan to Pawan = ₹ 3,500,000

Interest rate charged = 10%

Value of the loan taken by the firm = ₹ 200,000

Loss incurred = ₹ 10,000

To find: The amount to be transferred to Profit and Loss Appropriation Account  

Solution:

The calculation is shown below:

Net loss incurred for the year - ₹10,000

Add: Interest received on loan taken by the Pawan ₹ 350,000 (₹ 3500000 x 10/100)

Less: Interest on loan taken by the firm - ₹12,000 (₹ 200000 x 6/100) Amount transferred  ₹328,000

Hence, the amount to be transferred to Profit and Loss Appropriation Account  is ₹328,000