Question

Amit and Vijay started a partnership business on 1st April,2017. Their capital contributions were ₹ 2,00,000 and ₹ 1,50,000 respectively. The Partnership Deed provided that:
(a) Interest on capital be allowed @ 10% p.a.
(b) Amit to get a salary of ₹ 2,000 per month and Vijay ₹ 3,000 per month.
(c) Profits are to be shared in the ratio of 3 : 2.
Profit for the year ended 31st March, 2018 befor above appropriations was ₹ 2,16,000. Interest on drawings amounted to ₹ 2,200 for Amit and ₹ 2,500 for Vijay. Prepare Profit and Loss Appropriation Account.

Answer 1

Working Notes:

1. Calculation of Interest on Capital

Interest on Amit's Capital = $2,00,000 \times \frac{10}{100}=20,000$

Interest on Vijay's Capital = $1,50,000 \times \frac{10}{100}= 15,000$

2. Calculation of Profit Share of each Partner

Divisible Profit = 2,16,000 + 4,700 - 35,000 - 60,000 = 1,25,700.

Profit Sharing = 3 : 2.

Amit's Profit Share = $1,25,700 \times \frac{3}{5}=75,420$

Vijay's Profit Share = $1,25,700 \times \frac{2}{5}=50,280$

Answer 2

Answer:

Explanation

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