praveen and pawan are sharing profits and losses in the ratio 2:1. on april 1 2017 their capitals were praveen  rs 25000 and pawan  rs20000. prepare profit and loss appropriation a/c  and the partners capital accounts at the end of the year after considering the following items:

a) Interest on capital is to be allowed @5% p.a.
b)Int . on Loan advanced by Pawan for the whole year the amt. of loan being rs 15000.
c)int on partners drawing @6% p.a. Drawings:Praveen rs 5000 and  pawan rs 4000.
d)10% of divisible profits is to be transferred to reserve.
e)they earned profit of rs 35510 for the year ended 31 march 2018

Dear Student
 
 Profit and Loss Appropriation A/c 
               
 Date   Particulars     Amount   Date   Particulars     Amount 
       (Rs)         (Rs) 
               
   Interest on Loan         Net profit             35,510
   Praveen                    -            
   Pawan (15,000 x 6%)                 900                900        
           Interest on Drawings     
           Praveen (5,000 x 6% x 6/12)                 150  
           Pawan (4,000 x 6% x 6/12)                 120                270
               
   Interest on Capital :             
   Praveen (25,000 x 5%)             1,250          
   Pawan (20,000 x 5%)             1,000            2,250        
               
               
   Reserve A/c               3,263        
               
   Profit Transferred in 2:1           
   Praveen           19,578          
   Pawan             9,789          29,367        
               
               
               35,780                35,780

Partner's Capital A/c (Fluctuating Capital)
Particulars  Praveen   Pawan  Particulars  Praveen   Pawan 
      Bal B/d 25,000 20,000
 Interest on Drawings             150            120      
 Drawings          5,000         4,000      
       Interest on Capital  1,250 1,000
       Profit and loss Appropriation  19,578 9,789
           
Bal C/d / (Debit balance) 40,678 26,669      
           
  45,828 30,789   45,828 30,789


Regards

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