Mr. Subash a resident of India, earned the following incomes during the
financial year 2018-19.
i) Interest on securities 6,000/-
ii) Winnings from horse races (gross) 12,500/.
ii) Incomeearnedfrom sub-letting of house F 10,500/-
iv) Expensesincurredon sub-letting
T 500/-
v) Dividend from a foreign company
7 26,000/
vi) Interest on post office savings bank A/c T 2,000/-
vii) Ground rent for land received in Patna 5,000/-
vil) Income from agricultural land in Bangladesh 20,000/
ix) Directors fees 1,800/.
x)He received a gift from his cousina wrist watch worth 5,000/-on 1-6-2018.
xi) 700/- received as an A/c payee cheque as interest on debentures (listed)
of a company in which public are substantially interested.
xii) Intereston deposit under Gold monetisation scheme, 2015 is 15,000/.
xii) He received gift worth Rs. 45,000/- from his friend.
Computethe taxable income from other sources of Mr. Subash for the
assessmentyear 2019-20.
Answers
Answer:
Appropriations of profit
As there is no requirement for all of the appropriations considered below to be included by a specific partnership, exam questions may only include some of them. That means that you only need to deal with the appropriations referred to in the question.
Another point to remember is that the ‘appropriation account’ is an additional accounting statement that is required for a partnership. For a sole trader, the profit for the year is simply transferred to the credit side of the proprietor’s capital account (the double entry is completed by a debit entry in the statement of profit or loss, resulting in a nil balance on that statement). In the case of a partnership, the statement of profit or loss will still be debited, but the profit will be credited to the appropriation account, rather than the capital account. As each appropriation is dealt with, the double entry is completed through entries in both the appropriation account and the partner’s current account (if current accounts are not maintained by the partnership, the entries will be made in the capital accounts).
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Answer:
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