Arun and Arora were partners in a firm sharing profits in the ratio of 5:3, their fixed capital on 1-4-2010 were: Arun Rs 60,000 and Arora Rs 80,000. They agreed to allow interest on capital 12 % p.a. and to charge on drawing 15% p.a. The profit of the firm for the year ended 31-3-2011 before all the above adjustments were Rs 12,600. The drawing made by Arun were Rs 2,000 and by Arora Rs 4,000 during the year. Prepare Profit and Loss Appropriation A/c of Arun and Arora. Show your calculation clearly. The interest on capital will be allowed even if the firm incurs loss.

Arun and Arora were partners in a firm sharing profits in the ratio of

1.	Arun and Arora were partners in a firm sharing profits in the ratio of 5:3, their fixed capital on 1-4-2010 were: Arun Rs 60,000 and Arora Rs 80,000. They agreed to allow interest on capital 12 % p.a. and to charge on drawing 15% p.a. The profit of the firm for the year ended 31-3-2011 before all the above adjustments were Rs 12,600. The drawing made by Arun were Rs 2,000 and by Arora Rs 4,000 during the year. Prepare Profit and Loss Appropriation A/c of Arun and Arora. Show your calculation clearly. The interest on capital will be allowed even if the firm incurs loss.
Answer» Arun and Arora were partners in a firm sharing profits in the ratio of 5:3, their fixed capital on 1-4-2010 were: Arun Rs 60,000 and Arora Rs 80,000. They agreed to allow interest on capital 12 % p.a. and to charge on drawing 15% p.a. The profit of the firm for the year ended 31-3-2011 before all the above adjustments were Rs 12,600. The drawing made by Arun were Rs 2,000 and by Arora Rs 4,000 during the year. Prepare Profit and Loss Appropriation A/c of Arun and Arora. Show your calculation clearly. The interest on capital will be allowed even if the firm incurs loss.

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