Question

2. A partnership firm earned divisible profit of Rs. 5,00.000. interest on capital is to be provided
to artner is Rs. 3,00.000, interest on loan taken from partner is Rs. 50,000 and profit sharing
ratio of partners is 5:3 sequence the following in correct way
I Distribute profits between partners
II. Charge interest on loan to Profit and Loss A/C
III. Calculate the net profit Transfer to Profit and Loss appropriation A/C
IV. Provide interest on capital​

Answer 1

Answer:

PROFIT AND LOSS APPROPRIATION ACCOUNT FOR THE YEAR 2017

Particulars Amount Particulars Amount

To interest on capital

X-5,00,000*5%

Y-4,00,000*5% 45,000 By net profit 8,00,000

To Y's salary A/c

(5000*12) 60,000

To General Reserve A/c

(8,00,000-45,000-60,000)*10% 69,500

To profit transferred to

X's current A/c-4,37,850

Y's current A/c-1,87,650 6,25,500

8,00,000 8,00,000

PARTNER'S CAPITAL ACCOUNT

Particulars X Y Particulars X Y

To bal c/d 5,00,000 4,00,000 By bal b/d 5,00,000 4,00,000

Total 5,00,000 4,00,000 Total 5,00,000 4,00,000

PARTNERS CURRENT ACCOUNT

Particulars X Y Particulars X Y

To Drawings 72,000 50,000 By Interest on Capital A/c 25,000 20,000

BY Y's salary A/c 60,000

To bal c/d 3,90,850 2,17,650 By P&L App. A/c 4,37,850 1,87,650

Total 4,62,850 2,67,650 Total

Explanation: