A and B entered into partnership with capitals of Rs 4,00,000 and Rs 2

1.	A and B entered into partnership with capitals of Rs 4,00,000 and Rs 2,00,000 respectively and agreed to share profits & losses in the ratio of 3:2. Their partnership deed provided that interest on capital shall be allowed at 6% p.a. and it is to be treated as a charge against profits. Prepare the relevant account to allocate the profit in the following alternative cases : (i) If profit for the year is Rs 80,000; (ii) If profit for the year is Rs 20,000; (iii) If loss for the year is Rs 20,000.
Answer» A and B entered into partnership with capitals of Rs 4,00,000 and Rs 2,00,000 respectively and agreed to share profits & losses in the ratio of 3:2. Their partnership deed provided that interest on capital shall be allowed at 6% p.a. and it is to be treated as a charge against profits. Prepare the relevant account to allocate the profit in the following alternative cases : (i) If profit for the year is Rs 80,000; (ii) If profit for the year is Rs 20,000; (iii) If loss for the year is Rs 20,000.

A and B entered into partnership with capitals of Rs 4,00,000 and Rs 2,00,000 respectively and agreed to share profits & losses in the ratio of 3:2. Their partnership deed provided that interest on capital shall be allowed at 6% p.a. and it is to be treated as a charge against profits. Prepare the relevant account to allocate the profit in the following alternative cases : (i) If profit for the year is Rs 80,000; (ii) If profit for the year is Rs 20,000; (iii) If loss for the year is Rs 20,000.

Answer»

A and B entered into partnership with capitals of Rs 4,00,000 and Rs 2,00,000 respectively and agreed to share profits & losses in the ratio of 3:2. Their partnership deed provided that interest on capital shall be allowed at 6% p.a. and it is to be treated as a charge against profits. Prepare the relevant account to allocate the profit in the following alternative cases :

(i) If profit for the year is Rs 80,000;

(ii) If profit for the year is Rs 20,000;

(iii) If loss for the year is Rs 20,000.

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