Question

14. A and B are partners with capitals of 4,00,000 and 3,00,000 respectively. If firm eamed
a profit of 35,000 for the year ended 31 March, 2019, then interest on capital @ 10% pa
would be appropriated as:
(a) 7 40,000 and 30,000
(b) * 17,500 and 17.500
(c) 20,000 and 15.000
(d) None of these
15. Shivam and Ankit are partners in a firm sharing profits and losses in the ratio of 5:3. Their
van donaria Intorston enitale is a
long​

Answer 1

Answer:

 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

Explanation: