Question

Ramesh n Suresh were partners in in a firm sharing profits in the ratio of their capital contribution on commencement of business which were Rs.80000 and Rs.60000 respectively. The firm started business on April 1,2001 accordingly to the partnership agreement:
1 10% of profit is to be transfer to general reserve
2 interest on capital to be allowed at 12% p.a. and interest on drawing is to be charged at 10% p.a.
3 Ramesh and Suresh are you get monthly salary of rupees 2000-3000 respectively
The profit of the Year year ended March 31st ,2002 before making above appropriation was rupees 120000. Drawings of Ramesh and Suresh were rupees 40000 and 50000 respectively. Interest on drawings amounted to rupees 2000 for Ramesh and rupees 2500 for Suresh. Prepare profit and loss appropriation account it and partners capital account assuming that their capital are fluctuating

Answer 1

Explanation:

Ramesh n Suresh were partners in in a firm sharing profits in the ratio of their capital contribution on commencement of business which were Rs.80000 and Rs.60000 respectively. The firm started business on April 1,2001 accordingly to the partnership agreement:

1 10% of profit is to be transfer to general reserve

2 interest on capital to be allowed at 12% p.a. and interest on drawing is to be charged at 10% p.a.