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 4,00,000 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 2,53,000 (after interest on Yadu's loan)
during the year 2018 - 19. Partners' drawings for the year amounted to
Yadu : 80,000, Vidu : * 70,000 and Radhu : 50,000.
Prepare Profit and Loss Appropriation Account for the year ending
31st March, 2019.

Answer 1

P&L Appropriation A/c for the following transactions

Explanation:

Working Notes:

1)Calculation of Profits before Interest on Loan

  Interest on Loan given to firm = $80000 \times \dfrac{5}{12} \times \dfrac{6}{100}$

                                                    = 2000

  Profits before Interest = 253000 + 2000

                                        = Rs.255000

2) Calculation of Interest on Capital

Yadu = $900000 \times \dfrac{6}{100}$ = Rs. 54000

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

Radhu = $400000 \times \dfrac{6}{100}$ = Rs.24,000

Total = 54000 + 30000 + 24000 = 108000

3)Calculation of Interest on Drawings

Yadu = $80000 \times \dfrac{8}{100}$ = Rs.6400

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

Radhu = $50000 \times \dfrac{8}{100}$ = Rs.4000

Total = 16000

                             P&L Appropriation A/c

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

To Interest on  108000            By Net Profit               255000

Capital A/c                                (See W.N 1)

(See W.N 2)                               By Drawings                200000

To Partner                                 By Interest on              16000

  Capital A/c:                              Drawings                

 (4:3:3)(Bal. fig.)                          (See W.N 3)

Yadu                   145200

Vidu                    108900

Radhu                 108900

                                                                                                               

                     471000                                                      471000