Question

Q1. Weak, Able and Lazy are in partnership sharing profits and losses in the ratio of 2:1:1. It is agreed that
interest on capital will be allowed @ 10% per annum and interest on drawings will be charged @8% per
annum. (No interest will be charged/allowed on Current Accounts).
The following are the particulars of the Capital and Drawings Accounts of the partners:
mer
Tts
Weak
Able
Lazy
₹
75,000
Capital (1.1.2016)
30,000
40,000
Current Account (1.1.2016)
10,000
5,000 (Dr.) 5,000
Drawings
15,000
10,000
10,000
The draft accounts for 2016 showed a net profit of 60,000 before taking into account interest on
capitals and drawings and subject to following rectification of errors:
(a) Life Insurance premium of Weak amounting to 750 paid by the firm on 30th June, 2016 has been
charged to Miscellaneous Expenditure A/c.
(b) Repairs of Machinery amounting to 10,000 has been debited to Plant Account and depreciation
thereon charged @ 20%.
(c) Travelling expenses of 3,000 of Able for a pleasure trip to U.K. paid by the firm on 30th June, 2016
has been debited to Travelling Expenses Account.
You are required to prepare the Profit and Loss Appropriation Account, Current Accounts of partners
Weak, Able and Lazy for the year ended 31st December, 2016.​

Answer 1

Answer:

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