Nirmal and Pawan are partners sharing profits in the ratio of 3 : 2. The firm had given loan to Pawan of ` 5,00,000 on 1st April, 2019. Interest was to be charged @ 10% p.a. The firm took loan of Rs 2,00,000 from Nirmal on 1st October, 2019. Before giving effect to the above, the firm incurred a loss of Rs 10,000 for the year ended 31st March, 2020.
Determine the amount to be transferred to Profit and Loss Appropriation Account
Answers
Given:
Profit and loss sharing ratio = 3 : 2
Given amount of loan to Pawan = Rs 3,500,000
Interest rate charged = 10%
Value of the loan taken by the firm = Rs 200,000
Loss incurred = Rs 10,000
To find:
The amount to be transferred to Profit and Loss Appropriation Account = ?
Solution:
The calculation is shown below:
Net loss incurred for the year -Rs 10,000
Add: Interest received on loan taken by the Pawan Rs 350,000
Less: Interest on loan taken by the firm -Rs 12,000
Amount transferred $328,000
Hence, the amount to be transferred to Profit and Loss Appropriation Account is $328,000
Since the rate is not given for loan taken by the firm so we assume the 6% interest rate
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Answer:
Given:
Profit and loss sharing ratio = 3 : 2
Given amount of loan to Pawan = Rs 3,500,000
Interest rate charged = 10%
Value of the loan taken by the firm = Rs 200,000
Loss incurred = Rs 10,000
To find:
The amount to be transferred to Profit and Loss Appropriation Account = ?
Solution:
The calculation is shown below:
Net loss incurred for the year -Rs 10,000
Add: Interest received on loan taken by the Pawan Rs 350,000
Less: Interest on loan taken by the firm -Rs 12,000
Amount transferred $328,000
Hence, the amount to be transferred to Profit and Loss Appropriation Account is $328,000
Since the rate is not given for loan taken by the firm so we assume the 6% interest rate
Explanation: thanks