Question

9. Hari, Gopal and Ghanshyam are three partners in a firm who share profit in the
ratio of 2:1:1. Their capital is 28,800; 19,200 and 14,400 respectively.
Interest on Capital is allowed at 5% p.a. and interest on drawings is charged at 5%
p.a.
In the year 2017-18, before the above mentioned adjustments, firm's profit was
27,600. Interest on their drawings were 192; 240 and 288 respectively.
Prepare Profit & Loss Appropriation Account.
[Ans : Profit : Hari 12,600; Gopal 6,300; Ghanshyam * 6,300]

Answer 1

Answer:

7567 profit

Explanation:

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Answer 2

Given:

Hari, Gopal and Ghanshyam are three partners in a firm who share profit in the  ratio of 2:1:1. Their capital is 28,800; 19,200 and 14,400 respectively.  Interest on Capital is allowed at 5% p.a. and interest on drawings is charged at 5%  p.a.  In the year 2017-18, before the above-mentioned adjustments, the firm's profit was  27,600. Interest on their drawings were 192; 240 and 288 respectively.

To Find:

Prepare Profit & Loss Appropriation Account.

Solution:

• Interest on capital shall be transferred on the credit of partners capital account
• Profit after charging interest on drawing and allowing interest on capital is 25200 which is distributed in the ratio 2:1:1
• Interest on drawing shall be transferred to partners capital account on the debit side
• Profit shall be transferred to partners capital account on the credit side
• Interest on capital at the rate of 5% is allowed on opening capital as of 1st April 2017

Hence, the prepared P/L approximation account has been attached below,