Raj and Pritam have capitals of ` 2,00,000 and ` 1,00,000 respectively. Interest on capital is to be allowed as per partnership deed 6% per annum. Their profit-sharing ratio is 5 : 3. The profit for the year was ` 15,000. Actual distribution of profit & loss will be:
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profit transfer to Raj as interest on capital =
= 15,000 × 5/8
= 9,375
profit transfer to pritam as interest on capital =
= 15,000 × 3/8
= 5,625
Profit and loss appropriation a/c
Dr. Cr
particular. amt. particular. amt
To interest on capital. By profit. 15,000
raj -. 9,375
pritam -. 5,625. 15,000
15,000. 15,000
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