aj 20,000.)
Q. 32. A, B and C are partners and on 1st April, 2015, their Capital Accounts were
*5,00,000, 3,00,000 and 1,50,000 respectively.
The Partnership deed includes the following information:
(a) C is entitled to a salary of 12,000 p.a.
(b) Partner's are to be allowed interest on Capitals @ 6% p.a. and are to be
charged interest on drawings @ 12% p.a.
(C) C is entitled to an extra benefit of 5% of profits in excess of 50,000 after
providing for para (a), (b) and (c).
(d) B is entitled to 1/4th of the profits after providing for all the amounts in para
(a), (b)(c) and (d) and the balance profit will be shared by A and C in the ratio
of 7:3.
A has withdrawn 6,800 on 31st May, 2015 and 10,000 on 1st Nov. 2015. B has
withdrawn 2,000 at the end of each month whereas C has withdrawn 15,000 during
the year.
The net profit for the year ended 31st March, 2016 before making above
adjustments was 2,50,000.
Prepare Profit and Loss Appropriation Account and Partner's Capital Accounts for
the year ended 31st March, 2016.
Answers
Answer:
PROFIT AND LOSS APPROPRIATION A/C
(for the year ended 31st March, 2018)
Dr. Cr.
Particulars Amount Particulars Amount
To Salary to C 12000 By Net Profit a/c 172000
To Interest on Capital a/c
- A
- B
- C
5000
5000
10000
To Profit transferred to:
- A's Current a/c
- B's Current a/c
- C's Current a/c
50000
44000
46000
172000 172000
JOURNAL
1. Interest on Capital a/c..... Dr. 20000
To A's Current a/c 5000
To B's Current a/c 5000
To C's Current a/c 10000
(Being interest on capital transferred to the partner's current accounts)
2. Salary a/c.... Dr. 12000
To C's Current a/c 12000
(Being salary provided to C)
3. Profit and Loss Appropriation a/c.... Dr. 140000
To A's Current a/c 50000
To B's Current a/c 44000
To C's Current a/c 46000
(Being profit distributed among the partners)
Working Note:
Distribution of Profit:
Profit available for distribution= 172000-12000-20000
= 140000
A's share= [20000*1/4] + [30000*5/10] + [90000*1/3]
= 5000+15000+30000
= 50000
B's share= [20000*1/4] + [30000*3/10] + [90000*1/3]
= 5000+9000+30000
= 44000
C's share= [20000*2/4] + [30000*2/10] + [90000*1/3]
= 10000+6000+30000
= 46000