Q 10
Dear Student
Since rent and Interest on loan are charge against profit, they would be shown in Profit and loss Account.
Regards
Profit and Loss Appropriation A/c | |||||||
Date | Particulars | Amount | Date | Particulars | Amount | ||
(Rs) | (Rs) | ||||||
Net Loss | 79,800 | ||||||
(After Rent and Interest on Loan) | |||||||
Loss transferred | |||||||
Bat | 31,920 | ||||||
Ball | 47,880 | 79,800 | |||||
79,800 | 79,800 |
Calculation | ||
Net Profit / (Loss) before Rent and Interest on Loan | (9,000) | |
Less : Rent for Bat's Property | 5,000 x 12 | (60,000) |
Less : Interest on loan | ||
Bat | 2,40,000 x 6% x 6/12 | (7,200) |
Ball | 1,20,000 x 6% x 6/12 | (3,600) |
Total Profit / (Loss) to be Appropriated | (79,800) | |
Share of Profit : | ||
Bat | 79,800 x 2/5 | (31,920) |
Ball | 79,800 x 3/5 | (47,880) |
Since rent and Interest on loan are charge against profit, they would be shown in Profit and loss Account.
Regards