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Radha and Raman are partners in a firm sharing profits and losses in the ratio of 5:2. Capital contributed by them is Rs. 50,000 and Rs. 20,000 respectively. Radha was given salary of Rs. 10,000 and Raman Rs. 7,000 per annum. Radha advanced loan of Rs. 20,000 to firm without any agreement to rate of interest in deed while in deed rate of interest on capital was mentioned as 6% p.a. Profits for the year are Rs. 29,400. Prepare Profit and Loss Appropriation Account for the year ending 31st March 2015. Solution: Profit and Loss Appropriation account For the year ending on 31.03.2015 Dr. Cr. Particulars Rs. Particulars Rs. To Interest on Capital: Radha 3,000 Raman 1,200 To Partner’s Salary Radha 10,000 Raman 7,000 To Profits transferred to capital A/cs of: Radha 5,000 Raman 2,000 4,200 17,000 7,000 By Profit and Loss A/c (Net Profits)29,400 Less: Interest On Radha’s loan 1,200 28,200 28,200 28,200 When appropriation are more than available profits In such case available profits are distributed in the ratio of appropriation.

Posted by Akshit Baisoya 4 years, 7 months ago

CBSE > Class 12 > Accountancy

1 answers

U. Shri Kavya Kavya 2 years, 5 months ago

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ANSWER

Sia ? 4 years, 6 months ago

A nonprofit organization, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that operates as a business aiming to generate a profit for its owners.

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Sia ? 4 years, 7 months ago

Calculation of interest on Drawing of each patner
Interest thereon has been calculated for the average
Bhanu = 250000 × 6 % × 6 /12 = 7500
Charu = 1,00,000 × 6% × 6 /12 = 3000

Calculation on interest on Capital of each patner
Bhanu = 250,000 × 6 % = 15000
Charu = 250,000 × 6 % = 15000