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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
Profit and Loss Appropriation Account
Dr. Cr.
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
|
Profit transferred to |
|
Profit and Loss |
40,000 |
||
|
Ram’s Capital (20,000 – 1,250) |
18,750 |
|
|
||
|
Raj’s Capital (12,000 – 750) |
11,250 |
|
|
||
|
George’s Capital (8,000 + 1,250 + 750) |
10,000 |
|
|
||
|
|
40,000 |
|
40,000 |
||
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|
Liabilities |
Amount (Rs.) |
Amount (Rs.) |
Assets |
Amount (Rs.) |
Amount (Rs.) |
|
Mannu’s Capital |
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40,000 | Drawings: | 6,000 | |
|
Shristhi’s Capital |
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|
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|
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|
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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:
