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Question
Abhay, Siddharth and Kusum are partners in a firm, sharing profits in the ratio of 5:3:2. Kusum is guaranteed a minimum amount of Rs 10,000 as per share in the profits. Any deficiency arising on that account shall be met by Siddharth. Profits for the years ending March 31, 2016 and 2017 are Rs 40,000 and 60,000 respectively. Prepare Profit and Loss Appropriation Account.
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Solution
Profit and Loss Appropriation Account as on
March 31, 2016
Dr. Cr.
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||||||||
|
Profit transferred to |
20,000 |
Profit and Loss |
40,000 |
|||||||||
|
Siddharth’s Capital |
12,000 |
10,000 |
||||||||||
|
Less: Guarantee to Kusum’s |
(2,000) |
|||||||||||
| Kusum’s Capital |
8000 |
10,000 |
||||||||||
| Add: Deficiency received from Siddharth |
2,000 |
|||||||||||
|
40,000 |
40,000 |
|||||||||||
Profit and Loss Appropriation Account as on
March 31, 2017
Dr. Cr.
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
|
Profit transferred to |
|
Profit and Loss |
60,000 |
||
|
Abhay’s Capital |
30,000 |
||||
|
Siddharth’s Capital |
18,000 |
||||
|
Kusum’s Capital |
12,000 |
||||
|
|
60,000 |
|
60,000 |
||
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|
|
Sukesh (Rs) |
Verma* (Rs) |
|
Capital Accounts |
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|
Current Accounts |
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|
Drawings |
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Rakesh |
Month |
Rs. |
|
|
May 31, 2019 |
600 |
|
|
June 30, 2019 |
500 |
|
|
August 31, 2019 |
1,000 |
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|
November 1, 2019 |
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|
December 31, 2019 |
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|
January 31, 2020 |
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|
|
March 01, 2020 |
700 |
|
Rohan |
At the beginning of each month |
400 |
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|
|
Rs |
|
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|
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|
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|
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12,000 |
|
December 31 |
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| 6% Fixed Deposit (made on 31.3.2021) | 20,000 |
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|
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What will the amount of interest on drawings of the partners?
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Following is their Profit & Loss Appropriation Account.
| Particulars | (₹) | Particulars | (₹) |
| To Interest on Capital | By Profit & 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) | ___(1)___ | ||
| Anmol’s Capital A/c | ______ | ||
| ______ | ______ |
The amount to be reflected in blank (2) will be:
