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
Regards
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