Question

Sita and Gita are partners in a firm whose capital on 1st April, 2017 was
* 60,000 and 50,000 respectively. They are allowed interest on capital
@71% per annum. Sita gave 16,000 to the firm as loan on 1st Oct., 2017. Gita
is entitled to get an annual salary of 8,000. The profit for the year ended 31st
March, 2018 before making the above adjustments were 18,000. Prepare Profit
& Loss Appropriation Account.​

Answer 1

Answer:

Total 1,11,780

Explanation:

Notes : Net profit = profit-rent-interest on loan

= 1,35,000-24,000-300

= 1,10,700

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars Amount Particulars Amount

To Interest on capital

Precious-60,000*6%=3600

Noble-50,000*6%=3000

Perfect-30,000*6%=1800 8400 By net profit

(notes) 1,10,700

To partners salary

Precious-200*12=2400

Noble -300*12=3600 6000 By interest on drawings

4000*4*6%*4.5/12=360*3 1080

To profit share

First 70,000(4:2:1)

Precious-40,000

Noble- 20,000

Perfect-10,000

Balance equally i.e (1,11,780-8400-6000-70,000) =27,380

Precious-9127

Noble-9127

Perfect-9127