Question

Charu and Dushyant are partners with Capitals of ₹ 14,00,000 and ₹ 6,00,000 respectively. During the year ended 31st March 2024, they earned a profit of ₹ 5,00,000 before any of the following adjustments: Interest on Capital is to be allowed @ 7% p.a. Charu granted a loan of ₹ 1,00,000 to the firm on 1st April, 2023. Out of this amount, ₹ 25,000 were returned to her on 31st July 2023. Dushyant is to get a quarterly rent of ₹ 45,000 for the use of his property by the firm. Interest on Drawings is to be charged at 8% p.a. Drawings of the partners were: Charu ₹ 1,00,000 and Dushyant ₹ 25,000.

Based on the above information you are required to answer the following question:

Net Profit for the year will amount to ______.

विकल्प

• ₹3,20,000

• ₹ 5,00,000

• ₹ 3,15,000

• ₹ 1,80,000

Answer 1

Net Profit for the year will amount to ₹ 3,15,000.

Explanation:

Dr.	PROFIT AND LOSS ACCOUNT		Cr.
Particulars	₹	Particulars	₹
To Interest on Charu's Loan	5,000	By Profit for the year	5,00,000
To Rent (₹ 45,000 × 4)	1,80,000
To Net Profit transferred to Profit & Loss Appropriation A/c	3,15,000
	5,00,000		5,00,000

Interest on Loan:

6% on ₹1,00,000 for 4 months = ₹ 2,000

6% on 75,000 for 8 months      = ₹ 3,000

                                                  = ₹ 5,000

Dr.	PROFIT AND LOSS APPROPRIATION ACCOUNT				Cr.
Particulars	₹	₹	Particulars	₹	₹
To Interest on Capital:	98,000		By Profit & Loss A/c		3,15,000
Charu	42,000		By Interest on Drawings:
Dushyant		1,40,000	Charu (for 6 months)	4,000
To Profit transferred to:			Dushyant (for 6 months)	1,000	5,000
Charu's Capital A/c (1/2)	90,000
Dushyant's Capital A/c (1/2)	90,000	1,80,000
		3,20,000			3,20,000