P and Q are partners sharing profit and losses in the ratio of 3:2. On 1st April, 2017 their Capital were
: P Rs.5,00,000 and Q Rs.3,00,000. During the year ended 31st March, 2018, they earned a profit of
Rs.7,60,000. The partnership are:
i) Interest on capital is to be charged @ 8% p.a.
ii) P will get commission @ 3% on turnover.
iii) Q will get a salary of Rs.5,000 per month.
iv) Q will get commission 5% of Profit after deducting of interest, salary and after all commission.
v) P is entitled to rent of Rs.20,000 per month for use of his premises by the firm,
Partners' drawings for the year were : P Rs.40,000 and Q Rs. 30,000. Turnover for the year was
Rs.20,00,000. You are required to prepare the Profit and Loss Appropriation Account and the Capital
Accounts of the Partners.
[12]
PTO
Answers
Explanation:
PROFIT AND LOSS APPROPRIATION A/C
(for the year ended 31st March, 2018)
Dr. Cr.
Particulars Amount Particulars Amount
To Interest on capital a/c
- Sajal
- Kajal
2500
2000 By Profit and loss a/c 68460
To Reserve a/c
(68460+300+240-2500-2000) *10/100 6450 By interest on drawings a/c
- Sajal
- Kajal
300
240
To Profit transferred to:
- Sajal's Capital a/c
- Kajal's Capital a/c
38700
19350
69000 69000
Note: interest on loan has already been deducted before to give the net profit.
PARTNER'S CAPITAL A/C
Dr. Cr.
Particulars Sajal Kajal Particulars Sajal Kajal
To Drawings a/c 10000 8000 By Balance b/d 50000 40000
To interest on drawings a/c 300 240 By interest on capital a/c 2500 2000
To Balance c/d 80900 53110 By Profit and loss appropriation a/c 38700 19350
91200 61350