Question

Arun and Varun are partners in the profits and losses ratio of 2: 1. Their opening capital is Rs.
80,000 and Rs. 50,000 respectively. They earned a profit of Rs. 20,000 before the following:
(a) Interest on capital @ 8% p.a.
(b) Drawings on Interest: Arun Rs. 2,000, Varun Rs. 2,500
(C) Salary to Arun Rs. 3,000 p.a.
(d) Commission to Varun Rs. 2,000 p.a. Prepare P and L Appropriation A /C
How to treat the following in the absence of partnership deed :

Answer 1

net profits transferred to partners capital accounts are :

Arun =114600×2/3=76400

varun=114600×1/3=38200

profit and loss approriation account of arun and varun for the year ending was given in the picture