atul and mithun are partner sharing profit in the ratio of 3:2
balances as on 1st April 2019 were as follows
capital account (fixed):atul $500000 and mithun $600000
loan account:atul$300000(cr) and mithun $200000(dr)
it was agreed to aollow are charge interest @8%.p.a partnership deed provides to allowed interest on capital @10%.p.a. interest on drawing was charged $5000each.
profit before giving effect to above was $228000 for the year ended 31st March 2020
prepared profit and loss appropriation account
Answers
Answer:
Calculation of Profits to be transferred to P&L Appropriation A/c
Net Profits before Interest on loan Rs.2,28,000
Less: Interest on loan given to firm (Rs.24,000)
by Atul
3,00,000 * 8/100
Add: Interest received on loan Rs.16,000
taken by Mithun
2,00,000 * 8/100
Net Profits after Interest on Loan Rs.2,20,000
Net Profits after Interest on Loan Rs.2,20,000
Calculation of Interest on capital
Atul : 5,00,000 = Rs.50,000
Mithun : 6,00,000 = Rs.60,000
Total = Rs.1,10,000
P&L Appropriation A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
To Interest 1,10,000 By P&L A/c 2,20,000
on Capital A/c By Interest on 10,000
Drawings A/c
To Partners
Capital A/c:
(3:2)
Atul 72000
Mithun 48000
Explanation:
share of profit
Atul 72,000
Mithun 48,000
