Question

Anwar, Biswas and Divya are partners in a firm. On 1st April 2011 their capital accounts stood at Rs 8,00,000, Rs 6,00,000 and Rs 4,00,000 respectively. They shared profits and losses in the proportion of 3: 2: 1. Partners are entitled to interest on capital @ 6% per annum and salary to Biswas and Divya @ 4,000 per month and Rs 6,000 per quarter respectively as per the provisions of the partnership deed. Biswas's share of profit (excluding interest on capital but including salary) is guaranteed at a minimum of Rs 82,000 p.a. Any deficiency arising on that account shall be met by Divya. The profits of the firm for the year ended 31st March 2012 amounted to Rs 3,120,000. Prepare Profit & Loss Account for the year ended on 31st March 2012.

Answer 1

Profit and Loss Appropriation Account
Dr.			Cr.
Particulars	Rs	Particulars	Rs
To Interest on capital A/c Anwar      48,000 Biswas    36,000 Divya      24,000 To Salary to:  Biswas (Rs 4,000 x 12)   48,000  Divya (Rs 6,000 x 4)       24,000 To Profit transferred to:   Anwar's Capital A/c   66,000   Biswas's Capital A/c  46,000   Divya's Capital A/c     20,000	1,08,000     72,000       1,32,000	By Profit and Loss A/c	3,12,000
	3,12,000		3,12,000