Question

Amay, Anmol, and Rohan entered into a partnership on 1st July 2021 to share profits and losses in the ratio of 3:2:1. Amay guaranteed that Rohan’s share of profit after charging interest on capital @ 6% p.a would not be less than ₹ 36,000 p.a. Their fixed capital balances are: ₹ 2,00,000, ₹ 1,00,000 and ₹ 1,00,000 respectively. Profit for the year ended 31st March, 2022 was ₹1,38,000. Prepare Profit and Loss Appropriation A/c.

Answer 1

Dr.	Profit and Loss Appropriation A/c for the year ending on 31st March, 2022			Cr.
To Interest on Capital:			By Profit and Loss A/c	1,38,000
Amay’s Current A/c		9,000
Anmol’s Current A/c		4,500
Rohan’s Current A/c		4,500
To Partners’ Current A/c:
Amay	53,000	1,20,000
Anmol	40,000
Rohan	27,000*
		1,38,000		1,38,000

*Guarantee met for 9 months.