Question

Shikha and Fatima were partners in a firm sharing profits in the ratio of 5 3. Their fixed capitals on
1.4.2017 were Shikha Rs. 3,00,000 and Fatima R$ 4,00,000. They agreed to allow interest on capital
ended 31.3.2018 before all above adjustments were Rs. 63.000. The drawings made by Shikha were R.
@ 12% per annum and to charge on drawings @15% per annum. The profit of the firm for the year
10,000 and by Fatima Rs. 20,000 during the year. Prepare Profit and Loss Appropriation Account The
capital will be allowed even if the firm incurs a loss.​

Answer 1

Profit and Loss Appropriation Account

Explanation:

   Working Notes:-

Calculation of Interest on Capital :

Shikha = 3,00,000 × $\frac{12}{100}$

           = 36,000

Fatima = 4,00,000 × $\frac{12}{100}$

           = 48,000

Calculation of Interest on Drawings :

Shikha = 10,000 × $\frac{15}{100}$ × $\frac{6}{12}$

           = 750

Fatima = 20,000 × $\frac{15}{100}$ × $\frac{6}{12}$

           = 1,500

Calculation on Loss transferred to Partner's Current A/c :

Shiksha = 18,750 × $\frac{5}{8}$

             = 11,719

Fatima = 18,750 × $\frac{3}{8}$

            = 7,031

Pls find the Profit and Loss Appropriation Account in the attached pic below