Simmi and Sonu are partners in a firm, sharing profits and losses in the ratio of 3:1. The profit and loss account of the firm for the year ending March 31, 2006 shows a net profit of Rs 1,50,000. Prepare the Profit and Loss Appropriation Account by taking into consideration the following information:

 

(i)    Partners capital on April 1, 2005;

        Simmi, Rs 30,000; Sonu, Rs 60,000;

(ii)   Current accounts balances on April 1, 2005;

        Simmi, Rs 30,000 (cr.); Sonu, Rs 15,000 (cr.);

(iii)  Partners drawings during the year amounted to

        Simmi, Rs 20,000; Sonu, Rs 15,000;

(iv)  Interest on capital was allowed @ 5% p.a.;

(v)   Interest on drawing was to be charged @ 6% p.a. at an average of six months;

(vi)  Partners’ salaries : Simmi Rs 12,000 and Sonu Rs 9,000. Also show the partners’ current accounts.

 

 

 

Profit and Loss Appropriation Account

Dr.

 

 

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

 

 

Profit and Loss Account

1,50,000

Simmi

1,500

 

Interest on Drawings

 

Sonu

3,000

4,500

Simmi

600

 

 

 

 

Sonu

450

1,050

Partners’ Salaries

 

 

 

 

 

Simmi

12,000

 

 

 

 

Sonu

9,000

21,000

 

 

 

 

 

 

 

 

 

Profit transferred to

 

 

 

 

Simmi’s Current

94,162

 

 

 

 

Sonu’s Current

31,388

125,550

 

 

 

 

 

 

 

 

 

 

 

1,51,050

 

 

1,51,050

 

 

 

 

 

 

 

Partners’ Capital Account

Dr.

 

 

 

 

Cr.

Particulars

Simmi

Sonu

Particulars

Simmi

Sonu

 

 

 

Balance b/d

30,000

60,000

Balance c/d

30,000

60,000

 

 

 

 

 

 

 

30,000

60,000

 

30,000

60,000

 

 

 

 

 

 

 

Partners’ Current Account

Dr.

 

 

 

 

Cr.

Particulars

Simmi

Sonu

Particulars

Simmi

Sonu

Drawings

20,000

15,000

Balance b/d

30,000

15,000

Interest on Drawings

600

450

Interest on Capital

1,500

3,000

 

 

 

Partners’ Salaries

12,000

9,000

Balance c/d

1,17,662

43,388

Profit and Loss Appropriation

94,162

31,388

 

1,37,662

58,388

 

1,37,662

58,388

 

 

 

 

 

 

 

 

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