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Ajar, amar and amrit are partners sharing profit and losses in the ratio of 3:2:1 they are invested 60000; 40000;and 20000 respectively in the firm. In 2018 the firm earned a profit of 45000. Amrit is entitled to a salary of 5000 per year as per partnership deed partner's drawing during the year were 10000 ; 6000 and 4000 respectively. The interest on drawing amounted to 2000, 1000 and 1400 respectively. Prepare profit and loss appropriation account.

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235 cents Harding
Answer:

profits and losses in the ratio of A

2

1

B

10

3

,C

5

1after providing interest @ 5% on their

respective capitals, viz., A Rs. 50,000;

B Rs. 30,000 and C Rs. 20,000 and

allowing B and C a salary of Rs. 5,000

each per annum. During the year ended

31st March, 2018, A has drawn Rs. 10,000

and B and C in addition to their salaries

have drawn Rs. 2,500 and Rs.1,000

respectively. The Profit and Loss Account

for the year ended 31st March, 2018

showed a net profit of Rs. 45,000 before

charging (a) interest on capital and (b)

partners' salaries. On 1st April, 2017, the

balances in the Current Accounts of the

partners were A (Cr.) Rs. 4,500; B (Cr.) Rs.

1,500 and C (Cr.) Rs. 1,000. Interest is not

charged on Drawings or Current Account

balances. Show Partners' Capital and

Current Accounts as at 31st March, 2018

after division of profits In accordance with

the partnership agreement.

151
Harding
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