Question

Saoli and Paoli are partners in a firm sharing profits and losses equally. The trading profit for the year ending 31^st March, 2025 was ₹ 51,800.

Other information:

1. Interest on drawings: Saoli ₹ 1,200 and Paoli ₹ 1,000.
2. Interest on Paoli’s loan to the firm, not debited in the Profit & Loss a/c ₹ 6,000.
3. Interest on capital: Saoli ₹ 20,000 and Paoli ₹ 15,000.
4. Salary to partners: Saoli ₹ 15,000 and Paoli ₹ 10,000.

Prepare Profit & Loss Appropriation account for the year ended 31^st March, 2025.

Answer 1

Dr.	In the books of Saoli and Paoli P/L Appropriation A/c for the year ending 31.03.2025				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Interest on capital A/c:			By P/L A/c	51,800	45,800
Saoli’s capital	16,000	28,000	Interest on loan	(6,000)
Paoli’s capital	12,000		By Interest on drawings:
To Salary A/c:			Saoli’s capital	1,200	2,200
Saoli’s capital	12,000	20,000	Paoli’s capital	1,000
Paoli’s capital	8,000
		48,000			48,000