Question

23. R, I and M are partners in a firm. On 1st April, 2014, their capital accounts stood at 800000
6,00,000 and 4,00,000 respectively. They shared profits and losses in the proportion of
5:3 :2. Partners are entitled to interest on Capital @10% per annum and salary to I and M
@ 4,000 per month and 6,000 per quarter respectively as per the provisions of the partner
deed.
I's share of profit (excluding interest on capital but including salary) is guaranteed at
minimum of 1,00,000 per annum. Any deficiency arising on that account shall be met by M
The profits of the firm for the year ended 31st March, 2015 amount to 4,00,000. Prepare profit
and loss appropriation account for the year ended on 31st March, 2015.
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Answer 1

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