A, B and C were partners …

A, B and C were partners in a firm having capitals of ₹2,00,000; ₹2,00,000 and ₹80,000 respectively on 1st April, 2022. Their Current Account balances were A : *20,000; B: ₹10,000 and C: ₹5,000 (Dr.). According to the partnership deed the partners were entitled to interest on capital @ 10% p.a. B being the working partner was also entitled to a salary of ₹6,000 per quarter. The profits were to be divided as follows: (a) The first ₹60,000 in proportion to their capitals. (b) Next 1,00,000 in the ratio of 4: 3: 1. (c) Remaining profits to be shared equally. The firm made a profit of ₹2,80,000 for the year ended 31st March, 2023 before charging any of the above items. Prepare the Profit & Loss Appropriation Account and pass necessary journal entry for apportionment of profits.

On the basis of new partner capital

Illustration 27 of cash flow investing activiates

Illustration 27 cash flow

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On 1st April 2023 A and b comments to business with capital of ₹600000 and ₹200000 respectively on 31st March 2024 the net profit (before taking into account the provisions of deed) was ₹240000 interest on capital is to be allowed at 6% per annum b was entitled to a salary of ₹60000 per annum the drawings of the partners A and b were ₹60000 and ₹40000 respectively the interest on drawings for a being ₹2000 and b ₹1000 assuming that A and b are equal partners prepare the profit and loss appropriation account and partners capital account as at 31st March 2024

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Is depreciation charged from machinery an abnormal loss?

Assertion (A): A firm is reconstituted in the event of change in the profit sharing ratio among existing partners, admission of a partner, retirement of a partner and death of a partner. Reason (R): Reconstitution of the firm leads to change in profit-sharing ratio among the partners.

Sharma and varma were partners in a firm sharing profits in the ratio of 4:1. Their capitals on 1.04.2006 were sharma ₹500000 and verma ₹ 100000. The partnership deed provided that sharma will get a commission of 10% on the profit after allowing a salary ₹5000 to verma. The profit of the firm for the year ended 31st March 2007 was ₹280000.