Question

Simmi and Sonu are partners in a firm, sharing profits and losses in the ratio of 3:1. The profit and loss account of the firm for the year ending March 31, 2017 shows a net profit of Rs 1,50,000. Prepare the Profit and Loss Appropriation Account by taking into consideration the following information:
(i) Partners capital on April 1, 2016;
    Simmi, Rs 30,000; Sonu, Rs 60,000;
(ii) Current accounts balances on April 1, 2016;       
     Simmi, Rs 30,000 (cr.); Sonu, Rs 15,000 (cr.);
(iii) Partners drawings during the year amounted toSimmi, Rs 20,000; Sonu, Rs 15,000;
(iv) Interest on capital was allowed @ 5% p.a.;
(v) Interest on drawing was to be charged @ 6% p.a. at an
average of six months;
(vi) Partners’ salaries : Simmi Rs 12,000 and Sonu Rs 9,000. Also show the partners’ current accounts.

Answer 1

Profit and Loss Appropriation Account
Dr.							Cr.
Particulars			Amount (Rs.)	Particulars			Amount (Rs.)
Interest on Capital :				Profit and Loss Account			1,50,000
Simmi		1,500		Interest on Drawings :
Sonu		3,000	4,500	Simmi		600
				Sonu		450	1,050
Partners’ Salaries :
Simmi		12,000
Sonu		9,000	21,000
Profit transferred to :
Simmi’s Current		94,162
Sonu’s Current		31,388	1,25,550
			1,51,050				1,51,050

 

Partners’ Capital Account
Dr.					Cr.
Particulars	Simmi	Sonu	Particulars	Simmi	Sonu
			Balance b/d	30,000	60,000
Balance c/d	30,000	60,000
	30,000	60,000		30,000	60,000

 

Partners’ Current Account
Dr.					Cr.
Particulars	Simmi	Sonu	Particulars	Simmi	Sonu
Drawings	20,000	15,000	Balance b/d	30,000	15,000
Interest on Drawings	600	450	Interest on Capital	1,500	3,000
			Partners’ Salaries	12,000	9,000
Balance c/d	1,17,662	43,388	Profit and Loss Appropriation	94,162	31,388
	1,37,662	58,388		1,37,662	58,388