Jay, Vijay and Karan were partners of an architect firm sharing profits in the ratio of capitals
which were Rs.10,00,000; Rs.10,00,000 and Rs.5,00,000 respectively as on 1st April,2019. Their
Partnership Deed provides for the following:
1. A monthly salary of Rs.15, 000 each to Jay and Vijay.
2. Karan was guaranteed a profit of Rs.5, 00,000 and Jay guaranteed that he will earn an annual
fee of Rs.2, 00,000. Any deficiency arising because of guarantee to Karan will be borne by Jay
and Vijay in the ratio of 3:2.
During the year ended 31st March, 2020, Jay earned fee of Rs.1, 75,000 and profit of the firm
amounted to Rs.15, 00,000. Prepare Profit and Loss Appropriation Account.
Answers
Answer:
Explanation:
Profit and Loss Appropriation Account
For the year ended 31st March 2018
Particulars Amount (Rs.) Particulars Amount (Rs.)
To salary to be
credited to capital
accounts of: By Profit for the year 15,00,000
Jay 1,80,000 By Jay’s Capital A/c 25,000
Vijay 1,80,000 3,60,000
To divisible profit
to be credited to
Capital accounts of:
Jay 3,05,800
Vijay 3,59,200
Karan 5,00,000 11,65,000
15,25,000 15,25,000
Dr. Partner’s Capital A/c Cr
Date Particulars Jay Vijay Karan Date Particulars Jay Vijay Karan
2018 2018
Mar. 31 Mar. 31
To Profit & Loss
Appropriation A/c 25,000 By Profit & Loss
Appropriation A/c 1,80,000 1,80,000
Mar. 31 Mar. 31
To Balance c/d 4,60,800 5,39,200 5,00,000
By Profit & Loss
Appropriation A/c
3,05,800 3,59,200 5,00,000
4,85,800 5,39,200 5,00,000 4,85,800 5,39,200 5,00,000