Question

Read the following hypothetical situation and answer the following questions:

Richa and Anmol are partners sharing profits in the ratio of 3 : 2 with capitals of ₹ 2,50,000 and ₹ 1,50,000 respectively. Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an annual salary of ₹ 12,500. During the year ended 31st March 2023, the profits of the year prior to the calculation of interest on capital but after charging Anmol’s salary amounted to ₹ 62,000. A provision of 5% of this profit is to be made in respect of the manager’s commission. Following is their Profit and Loss Appropriation Account: Dr. Profit and Loss Appropriation Account Cr. Particulars Amount (₹) Particulars Amount (₹) To Interest on Capital   By Profit and loss account (After manager’s commission) ___(2)___ Richa ---------     Anmol ---------     To Anmol’s Salary A/c 12,500     To Profit transferred to:       Richa’s Capital A/c (1) ______     Anmol’s Capital A/c ---------       ---------   ---------

1. The amount to be reflected in blank (1) will be:
   1. ₹ 37,200
   2. ₹ 44,700
   3. ₹ 22,800
   4. ₹ 20,940
2. The amount to be reflected in blank (2) will be:
   1. ₹ 62,000
   2. ₹ 74,500
   3. ₹ 71,400
   4. ₹ 70,775

Answer 1

1. ₹ 20,940
2. ₹ 71,400

Dr.	Profit and Loss Appropriation Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Interest on Capital		By Profit and loss account (After manager’s commission)	71,400
Richa	15,000
Anmol	9,000
To Anmol’s Salary A/c	12,500
To Profit transferred to:
Richa’s Capital A/c	20,940
Anmol’s Capital A/c	13,960
	71,400		71,400