Question

Akhil and Bimal are partners sharing profits in the ratio of 3 : 2. Akhil gave loan to the firm of Rs 1,00,000 on 1st October, 2019. On the same date, the firm gave loan to Bimal of Rs1,00,000. They do not have an agreement as to interest. Akhil had also given his personal property for firm’s godown at a monthly rent of Rs 5,000. Firm earns profit of Rs 1,03,000 (before above adjustments) for the year ended 31st March, 2020. Show the distribution of profit for the year
sol-Profit and Loss Adjustment Account

Particulars Amount
Rs Particulars Amount
Rs
To Rent(5000 x 12 ) 60,000 Profit and Loss A/c 103000
To Interest on loan Akhil (100000 x 6/100 x 6/12) 3000
Profit transferred to Profit and Loss
Appropriation A/c
Akhil – 24000
Bimal - 16000 40,000
103000 103000

Answer 1

Answer:

Profit & loss Appropriation Account

( March 31, 2017)

To Akhil's interest on loan                                         2000

To Rent                                                                          60000

To profit transferred to partners current Account  40000

Akhil's capital      24000

Bimal's capital       16000

Total                                                                 102000

By  Profit & loss Account                                   100000

By Bimal's loan interest                                       2000

Total                                                                         102000

Answer 2

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