Ajar, Amar and Amrit are partners sharing profit and loss in the ratio of 3: 2:1. They
have invested 6,000 4.000 and * 2000 respectively in the firm in 2017, the
firm earned a profit of * 4500. Amrit is entitled to a salary of 500 per year as per
partnership deed Partners' drawings during the year were ? 1000, 600 and 400
respectively. The interest on drawings amounted to 200, 100 and 140
respectively
Prepare Capital Accounts of the partners considering capital as (A) Fixed and
(B) Fluctuating. Also prepare Profit and Loss Appropriation Account
Answers
P& L Appropriation Account
To Partner Salary By Profit and Loss a/c 4500
Ajar 500 By Interest on Drawings:
Amar 500 A 200
Amrit 500 1500 B 100
C 140 440
To Profit transferred
Ajar's Capital (*or Current) 1720
Amar's Capital (*or Current) 1147
Amrit's Capital (*or Current) 573
4940 4940
A) If capitals are fixed
Capital A/c
Ajar Amar Amrit Ajar Amar Amrit
By Bal B/d 6000 4000 2000
To Bal c/d 6000 4000 2000
6000 4000 2000 6000 4000 2000
Current A/c
Ajar Amar Amrit Ajar Amar Amrit
To Drawings 1000 600 400 By Salary 500 500 500
To Int. on 200 100 140 By P &L
drawings appro. 1720 1147 573
To Bal c/d 1020 947 533
2220 1647 1073 2220 1647 1073
B) If capital is fluctuating
Capital A/c
Ajar Amar Amrit Ajar Amar Amrit
By Bal B/d 6000 4000 2000
To Drawings 1000 600 400 By Salary 500 500 500
To Int. on 200 100 140 By P &L
drawings appro. 1720 1147 573
To Bal c/d 7020 4947 2533
8220 5647 3073 8220 5647 3073
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