x, y, and z are in the partnership and on 1st April, 2015, their respective capital were Rs, 4000, Rs, 2780 and Rs, 1590. Y is entitled to a salary of Rs, 250 and Z to one of Rs, 200 p.a, payable before division of profits. Interest is allowed on capital at 5% p.a. but is not charged on drawings. Of the net divisible profits X is entitled to 40% of the first Rs, 1000; Y to 35%and Z to 25%, over that amount profits are shared equally. The profit for the year ended 31st March, 2016, after debiting partnership salaries, but before charging interest on capitals, was Rs, 2317, and the partners had drawn Rs, 800 each on account of salaries, interest and profits. Pass the closing entry of the profit and loss account and prepare partner capital accounts for the year.
Answers
Answer:
PROFIT AND LOSS APPROPRIATION ACCOUNT
Particulars Amount Particulars Amount
To Interest on capital
A= 50000*5%=2500
B=30000*5%=1500
C=20000*5%=1000 5000 By net profit 45000
To salary to
B= 5000
C=5000 10000
To profit T/f to
P's current A/c 15000
Q's current A/c 9000
R's current A/c 6000 30000
Total 45000 Total 45000
PARTNERS CAPITAL ACCOUNT
Particulars A B C Particulars A B C
To balance c/d 50000 30000 20000 By balance b/d 50000 30000 20000
Total 50000 30000 20000 Total 50000 30000 20000
PARTNERS CURRENT ACCOUNT
Particulars A B C Particulars A B C
To drawings
10000 7500 6000 By bal b/d 4500 1500 1000
By Interest on capital 2500 1500 1000
By bal c/d 12000 9500 7000 By Salaries 5000 5000
P/L Appropriation A/c 15000 9000 6000
Total 22000 17000 13000 22000