Question

Yadu, Vidu and Radhu were partners in a firm sharing profits in the
ratio of 4:3:3. Their fixed capitals on 1st April, 2018 were 9,00,000,
= 5,00,000 and 34,00,000 respectively. On 1st November, 2018, Yadu
gave a loan of 80,000 to the firm. As per the partnership agreement :
(i) The partners were entitled to an interest on capital @ 6% p.a.
(ii) Interest on partners' drawings was to be charged @ 8% p.a.
The firm earned profits of 32,53,000 (after interest on Yadu's loan)
during the year 2018 - 19. Partners' drawings for the year amounted to
Yadu : 380,000, Vidu : * 70,000 and Radhu : 3 50,000.
Prepare Profit and Loss Appropriation Account for the year ending
31st March, 2019.
​

Answer 1

P&L Appropriation A/c for the year ending 31st March,2019

Explanation:

                                   P&L Appropriation A/c

  Particulars            Amount(Rs.)              Particulars      Amount(Rs.)

To Interest on           2,88,000      By P&L A/c(NP)         32,55,000

Capital A/c                                       (See W.N 3)  

(See W.N 1)                                    By Drawings               8,00,000

                                                       (See W.N 2)

To Partner Capital A/c:                   By Interest on

Yadu                        15,32,400         Drawings A/c

Vidhu                       11,49,300             (See W.N 2)

Radhu                      11,49,300

                                                                                                                       

                              40,55,000                                            40,55,000

                                                                                                                       

Working Notes:

1)Calculation of Interest on capital

Yadu = $900000\times \dfrac{6}{100}$  = Rs.54,000

Vidhu = $500000\times \dfrac{6}{100}$  = Rs.30,000

Radhu = $34,00,000 \times \dfrac{6}{100}$  = Rs.2,04,000

Total = Rs.2,88,000

2)Calculation of Drawings and Interest thereon

Total Drawings = $380000+70000+350000$ = 8,00,000

Interest on drawings:

Yadu = $380000\times \dfrac{8}{100}$  = Rs.30,400

Vidhu = $70000 \times \dfrac{8}{100}$  = Rs.5600

Radhu = $350000\times \dfrac{8}{100}$  = Rs.28,000

Total = 64,000

3)Calculation of Net Profit before Interest on Loan given by firm to Yadu

Net Profit after interest                    Rs.32,53,000

Add: Interest on Loan                      Rs.2,000

($80,000 \times \dfrac{5}{12}\times \dfrac{6}{100}$)

                                                                                           

  Net Profit before Interest               Rs.32,55,000