A,B and C were partners in a firm having capitals of Rs 60,000 Rs 60,000 and Rs 80,000 respectively. There current account balance were A-10,000 , B-5000 and C-2000 (Dr.).According to the partnership deed the partners were entitled to an intt. on capital @ 5% p.a. C being the working partner was also entitled to a salary of Rs 6,000 p.a. The profits were to be divided as follows:

(i)The first Rs 20,000 in proportion to their capitals.

(ii)next Rs 30,000 in the ratio of 5:3:2.

(iii)remaining profits to be shared equally.

During the year the firm made a profit of Rs 1,56,000 before charging any of the above items. prepare the profit and loss appropriation on A/C.

Profit and Loss Appropriation Account

for the year ended

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

1,56,000

A

3,000

 

 

 

B

3,000

 

 

 

C

4,000

10,000

 

 

C( Salary)

6,000

 

 

Profit transferred in Capital Ratio to:

 

 

 

A’s Capital A/c

6,000

 

 

 

B’s Capital A/c

6,000

 

 

 

C’s Capital A/c

8,000

20,000

 

 

Profit transferred in 5:3:2 to:

 

 

 

A’s Capital A/c

15,000

 

 

 

B’s Capital A/c

9,000

 

 

 

C’s Capital A/c

6,000

30,000

 

 

Profit transferred equally to:

 

 

 

A’s Capital A/c

30,000

 

 

 

B’s Capital A/c

30,000

 

 

 

C’s Capital A/c

30,000

90,000

 

 

 

1,56,000

 

1,56,000

 

 

 

 

  • 88
What are you looking for?