Sudha, Naresh and Geeta were partners in a firm sharing profits and loses in the ratio of 5:3:2. Their capital were 600000,400000 and 200000 respectively. Their partnership deed provided for the following: 1) interest on capital @9% p.a. 2) interest on drawings @12 % p.a. 3) Salary to sudha 30000 per month and to naresh 40000 per quarter. During the year dusha withdraw 50000 at the end of each quarter, naresh withdraw 50000 in th beginning of each half year and geeta withdraw 70000 at the end of each half year. The profit of the firm for the year was 700000. Prepare profit and loss appropriation account.
Dear student
WORKING NOTES:
INTEREST ON CAPITALS:
SUDHA: 600000 X 9/100 = 54000
NARESH: 400000 X 9/100 = 36000
GEETA: 200000 X 9/100 = 18000
INTEREST ON DRAWING:
SUDHA: IN THE END OF EACH QUARTER= 50000 X 12% X 4.5/12 = 2250
NARESH: IN THE BEGINNING OF EACH HALF YEAR= 50000 X 12% X 9/12 = 4500
GEETA: AT THE END OF EACH HALF YEAR= 70000 X 12% X 3/12 = 2100
SALARY:
SUDHA: 30000 X 12(MONTHLY) = 360000
NARESH: 40000X 4(QUARTERLY) = 160000
SHARE OF PROFIT:
SUDHA: 80850 X 5/10 = 40425
NARESH: 80850 X 3/10= 24255
GEETA: 80850 X 2/10= 16170
Regards
DATE | PARTICULARS | AMOUNT | DATE | PARTICULARS | AMOUNT |
TO INTEREST ON CAPITAL: SUDHA 54000 NARESH 36000 GEETA 18000 | 108000 | BY NET PROFIT | 700000 | ||
TO SALARY: SUDHA 360000 NARESH 160000 | 520000 | BY INTEREST ON DRAWINGS: SUDHA 2250 NARESH 4500 GEETA 2100 | 8850 | ||
TO NET PROFIT TRANSFERRED TO: SUDHA 40425 NARESH 24255 GEETA 16170 | 80850 | ||||
708850 | 708850 |
WORKING NOTES:
INTEREST ON CAPITALS:
SUDHA: 600000 X 9/100 = 54000
NARESH: 400000 X 9/100 = 36000
GEETA: 200000 X 9/100 = 18000
INTEREST ON DRAWING:
SUDHA: IN THE END OF EACH QUARTER= 50000 X 12% X 4.5/12 = 2250
NARESH: IN THE BEGINNING OF EACH HALF YEAR= 50000 X 12% X 9/12 = 4500
GEETA: AT THE END OF EACH HALF YEAR= 70000 X 12% X 3/12 = 2100
SALARY:
SUDHA: 30000 X 12(MONTHLY) = 360000
NARESH: 40000X 4(QUARTERLY) = 160000
SHARE OF PROFIT:
SUDHA: 80850 X 5/10 = 40425
NARESH: 80850 X 3/10= 24255
GEETA: 80850 X 2/10= 16170
Regards