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Question
Ram, Raj and George are partners sharing profits in the ratio 5 : 3 : 2. According to the partnership agreement George is to get a minimum amount of Rs 10,000 as his share of profits every year. The net profit for the year 2013 amounted to Rs 40,000. Prepare the Profit and Loss Appropriation Account.
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Solution
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Profit and Loss Appropriation Account |
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Dr. |
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Cr. |
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Particulars |
Amount (Rs.) |
Particulars |
Amount (Rs.) |
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Profit transferred to |
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Profit and Loss |
40,000 |
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Ram’s Capital (20,000 – 1,250) |
18,750 |
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Raj’s Capital (12,000 – 750) |
11,250 |
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George’s Capital (8,000 + 1,250 + 750) |
10,000 |
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40,000 |
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40,000 |
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|
Rs |
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|
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| S. No. | Particulars | Amount (₹) |
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|
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| 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 (1) will be:
