Question

P, Q and R are partners in a firm sharing profits in the ratio of 2:2:1. R is guaranteed Rs.1,20,000 as his share of profit

every year. Deficiency, if any, on that amount shall be borne by Q. the profits for the year ending 31.03.2018

Rs.5,00,000. Prepare profit and loss appropriation account.​

Answer 1

Answer:

Profit &loss appropriation a/c

dr. cr

divisible profit profit &loss. 500000

P. 500000×2/5 200000

Q 500000×2/5

200000

- paid to R. 20000

180000

R. 500000×1/5 100000

+ received from Q 20000

120000