Question

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 ​

Answer 1

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    

Answer 2

Explanation:

share of profit

Atul 72,000

Mithun 48,000