reema and seema are partners sharing profit equally reema and seema get 15000 salary per month interest on capital allowed 5 percent p.a. interest on drawings charged 10 percent p.a. their capital were 500000 each drawing during year 60000 each . firm incurred loss of 100000 prepare profit and loss appropriation account
Answers
Solution :-
It is not clear in the question that the salary given to each partner is Rs. 15000 or it is total Rs. 15000 to both the partners. I have assumed Rs. 15000 per month to each partner.
Profit and Loss Appropriation Account
For the year ended 31st March .......
Dr. Cr.
____________________________________________________________
Particular Amount Particular Amount
____________________________________________________________
To Profit and Loss A/c 100000 By Interest on Drawing A/c
(Net Loss) Reema (60000 × 10)/100 6000
To Partner's Salary A/c Seema (60000 × 10)/100 6000
Reema (15000 × 12) 180000 By Loss Transferred to
Seema (15000 × 12) 180000 Reema's Capital A/c
(448000 × 1/2) 224000
Seema's Capital A/c
(448000 × 1/2) 224000
__________ _______
460000 460000
__________ _______
There will be no Interest on Capital will be provided because the firm has incurred loss.