in the first question p.a and date of drawing has not been given and I.O.D is calculated without taking into consideration the time factor.
in the second question the date of drawing and p.a has not been given but it calculated for an average period of 6 months.what is the correct treatment?
in the first question p.a and date of drawing has not been given and I.O.D is calculated without taking into consideration the time factor.
in the second question the date of drawing and p.a has not been given but it calculated for an average period of 6 months.what is the correct treatment? the fixed amount is withdrawn at the end ofeach quarter au
Total Drawings x Rate oflnter€g 4'/' 16,000 x 9/2 x 1/12 x 6/100=
the whole amount for 4h months.
Illustration 38. X and Yentered into partnershiP on ISt April, 2016 and contributed
and 3.60,OOO respectively as their capitals. On October, 2016, X granted a loan Of
to the firm. The terms of the partnership agreement are as follows:
(i) Interest on capital @ p.a. and Interest on Drawings @ 10%. n
(ii) X to get a monthly salary of 12,000 and Y to get salary of 54,000 per quarter.
(iii) X is entitled to a commission of on sales. sales for the year were
(iv) 20% of profits before charging Interest on Drawings but after making appropriations to
(v) Profits and losses are to be shared in the ratio of their capital contribution up to R
and above 4,20,000 equally.
Profit for the year ended 31st March, 2017, before
Drawings of X and Y were and respec Ive y.
Prepare Profit and Loss Appropriation Account and Partners' Capital Accounts.
Notes:
1. As per Tt
2. Interest
not give
3. Transfe
5. PAST
ERR
So metin
stateme
exampl
profits
and 01
Solution:
Particulars
To Interest on Capital A/cs:
PROFIT AND LOSS APPROPRIATION ACCOUNT
for the year ended 3 st March, 2017
To
TO
TO
To
x g x 12/100)
Y (Z x 12/100)
Partners' Salary:
xg 12,000 x 12)
Y R 54,000 x 4)
Commission to X
General Reserve (Note 3)
Profit transferred to:
X's Capital A/c
Y's Capital A/c
57,600
43,200 1,00800
2, 16,000
42,000
Particulars
By Profit and Loss AJc:
Net Profit
Less: Interest on X's Loan
6/100)
(Note 1)
By Interest on Drawings: (Note 2)
X x 10/100 x 6/12)
x 10/100 x 6/12)
-11
3,600
12,000
15,000
27,000
passvn
Let u
of a
part
To
