Question

A,B and C are partners in a firm sharing profits and losses in the ratio of 3:2:1. They had capitals of

Rs.3,00,000(Credit), Rs. 2,00,000 (Credit ) and Rs 40,000 (Debit) respectively as on 1st April,2018.

Their Partnership Deed provides for the following:

(i) Interest on Capital is to be allowed @5% p.a. to the partners with credit capital balance.

(ii) Interest on drawings is to be charged @ 6% p.a.

(iii) A is entitled to annual salary of Rs. 25,720 together with a commission of 10% on Net Profit

after charging his own commission.

(iv) B is entitled to a salary of Rs. 7,500 per quarter.

(v) Each partner withdrew Rs.500 in the middle of each month and C withdrew an additional

Rs.4,000 on 30th June , 2018.

(vi) C is entitled to a rent of Rs. 1,000 per month for the use of his premises by the firm.

Net profit for the year 2018-19 before making any of the above mentioned adjustments amount

to Rs. 2,32,000. Prepare Profit and Loss Appropriation Account.​

Answer 1

Answer:

it will same as this u can change the values.

Explanation:

(i) REVALUATION A/C

Dr. Cr.

Particulars Amount Particulars Amount

To Provision for Doubtful Debts 1700 By Prepaid advertisement Expenses 1200

To A's Capital

(revenue expense) 2100 By B's Capital

(personal expenses) 2000

By Loss transferred to:

- A's Capital a/c

- B's Capital a/c

- C's Capital a/c

300

200

100

3800 3800

(ii) PARTNER'S CAPITAL A/C

Dr. Cr.

Particulars A B C D Particulars A B C D

To Revaluation a/c

(personal) 2000 By Balance b/d 60000 40000 40000

To Revaluation a/c

(loss) 300 200 100 By Cash a/c 40000

To Balance c/d 61800 37800 39900 50000 By Creditors 10000

By revaluation expenses 2100

62100 40000 40000 50000 62100 40000 40000 50000

(iii) BALANCE SHEET

Dr. Cr.

Liabilities Amount Assets Amount

Capital a/cs:

- A

- B

- C

- D

61800

57800

39900

50000 Land and Building 50000

Bills Payable 10000 Plant and Machinery 40000

Creditors 30000

(-) D's Capital (10000) 20000 Furniture 30000

Stock 20000

Prepaid Advertisement

Expenses 1200

Debtors 30000

(-) Provision for (1700)

Doubtful debts

(+) Bills receivable 4000

dishonoured 32300

Bills receivable 20000

Bank (10000+40000-4000) 46000

239500 239500