Question

Moli, Bhola and Raj were partners in a firm sharing profits and losses in the ratio of 3 : 3 : 4. Their partnership deed provided for the following :
(i) Interest on capital @ 5% p.a.
(ii) Interest on drawing @ 12% p.a.
(iii) Interest on partners' loan @ 6% p.a.
(iv) Moli was allowed an annual salary of Rs 4,000; Bhola was allowed a commission of 10% of net profit as shown by Profit and Loss Account and Raj was guaranteed a profit of Rs 1,50,000 after making all the adjustments as provided in the partnership agreement.
Their fixed capitals were Moli : Rs 5,00,000; Bhola : Rs 8,00,000 and Raj : Rs 4,00,000. On 1^st April, 2016 Bhola extended a loan of Rs 1,00,000 to the firm. The net profit of the firm for the year ended 31^st March, 2017 before interest on Bhola's loan was Rs 3,06,000.
Prepare Profit and Loss Appropriation Account of Moli, Bhola and Raj for the year ended 31^st March, 2017 and their Current Accounts assuming that Bhola withdrew Rs 5,000 at the end of each month, Moli withdrew Rs 10,000 at the end of each quarter and Raj withdrew Rs 40,000 at the end of each half year.

Answer 1

In the books of Moli, Bhola & Raj

Profit and Loss Account 

for the year ended 31^st March’ 2017

Dr.                                                                                                     Cr

Particulars	Amount (Rs)	Particulars	Amount (Rs)
Interest on Bhola's Loan	6,000	Net Profit	3,06,000
Net Profit transferred to P/L Appropriation A/c	3,00,000
	3,06,000		3,06,000

           

        In the books of Moli, Bhola & Raj P\L Appropriation A\c 

Particulars		Amount (Rs)	Particulars			Amount (Rs)
Interest on Capital:			Net Profit transferred from P/L A/c			3,00,000
Moli's Current	25000		Interest on Drawing
Bhola's Current	40000		Moli's Current	1800
Raj's Current	20000	85000	Bhola's Current	3300
Moli's Salary		4000	Raj's Current	2400		7500
Bhola's Commission		30000
Profit transferred to:
Moli's Current (56550 - 37300)	19250
Bhola's Current (56550 - 37300)	19250
Raj's Current (75400 + 37300 + 37300)	150000	1,88,500
		3,07,500				,07,500

 

                                    Partners' Current Account 

Dr.							Cr.
Particulars	Moli	Bhola	Raj	Particulars	Moli	Bhola	Raj
By Drawings	60,000	40,000	80,000	By Profit & Loss Appropriation A/c-IOC	25,000	40,000	20,000
By Profit & Loss Appropriation A/c-IOD	1800	3300	2400	By Profit & Loss Appropriation A/c-Salary	4,000
By Balance c/d		45,950	87,600	By Profit & Loss Appropriation A/c-Commission		30,000
				By Profit & Loss Appropriation A/c-Divisible Profit	19250	19250	150000
				By Balance c/d	13,550
	61,800	89,250	1,70,000		61,800	89,250	1,70,000