Atul and Mithun are partners sharing profit in ratio 3:2, balance is on 1st April 2019 were as follows capital account (fixed) :- Atul 500000 and Mithun 600000 .
loan account of Atul 3 lakh (Cr) and Mithun 2 lakh (Dr).
it was agreed to allow and charge interest @ 8% per annum .partnership deed provided to allow interest on capital @ 10% per annum interest on drawing was changed rupees 5000 each.
profit before giving effect to above was 2,28,000 for year ended 31st March 2020. prepare profit and loss appropriation account
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Answer: if there was debit balance of loan it means the loan in given by firm to partner... And if there was credit balance that means the loan is taken by firm from partner
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