A,B and C were partners in a firm having capitals of Rs 60,000 Rs 60,000 and Rs 80,000 respectively. There current account balance were A-10,000 , B-5000 and C-2000 (Dr.).According to the partnership deed the partners were entitled to an intt. on capital @ 5% p.a. C being the working partner was also entitled to a salary of Rs 6,000 p.a. The profits were to be divided as follows:
(i)The first Rs 20,000 in proportion to their capitals.
(ii)next Rs 30,000 in the ratio of 5:3:2.
(iii)remaining profits to be shared equally.
During the year the firm made a profit of Rs 1,56,000 before charging any of the above items. prepare the profit and loss appropriation on A/C.
Profit and Loss Appropriation Account for the year ended | |||||
Dr. |
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| Cr. | ||
Particulars | Amount Rs | Particulars | Amount Rs | ||
Interest on Capital A/c: |
| Profit and Loss A/c | 1,56,000 | ||
A | 3,000 |
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B | 3,000 |
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C | 4,000 | 10,000 |
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C( Salary) | 6,000 |
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Profit transferred in Capital Ratio to: |
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A’s Capital A/c | 6,000 |
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B’s Capital A/c | 6,000 |
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C’s Capital A/c | 8,000 | 20,000 |
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Profit transferred in 5:3:2 to: |
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A’s Capital A/c | 15,000 |
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B’s Capital A/c | 9,000 |
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C’s Capital A/c | 6,000 | 30,000 |
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Profit transferred equally to: |
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A’s Capital A/c | 30,000 |
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B’s Capital A/c | 30,000 |
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C’s Capital A/c | 30,000 | 90,000 |
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| 1,56,000 |
| 1,56,000 | ||
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