Question

Cheran, Pallavan are partners with capitals of Rs.60,000 and Rs.20,000

respectively on 1st January 2001. The Trading Profit (before taking into account

the provision of the Deed) for the year ended 31st December, 2001 was

Rs.12,000. Interest on capital is to be allowed at 6% per annum. Pallavan is

entitled to a salary of Rs.3,000 per annum. The drawings of the partners were

Cheran Rs.2,000 and Pallavan Rs.1,000; the interest on drawings for Cheran

being Rs.100 and for Pallavan Rs.50.

Assuming that Cheran, Pallavan are equal partners, prepare the Profit and

Loss Appropriation Account and the partners’ Capital Account (The capitals are

fluctuating as at 31st December, 2001).​

Answer 1

Answer:

Cheran, Pallavan are partners with capitals of Rs.60,000 and Rs.20,000

respectively on 1st January 2001. The Trading Profit (before taking into account

the provision of the Deed) for the year ended 31st December, 2001 was

Rs.12,000. Interest on capital is to be allowed at 6% per annum. Pallavan is

entitled to a salary of Rs.3,000 per annum. The drawings of the partners were

Cheran Rs.2,000 and Pallavan Rs.1,000; the interest on drawings for Cheran

being Rs.100 and for Pallavan Rs.50.

Assuming that Cheran, Pallavan are equal partners, prepare the Profit and

Loss Appropriation Account and the partners’ Capital Account (The capitals are

fluctuating as at 31st December, 2001).