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Sukesh and Vanita were partners in a firm. Their partnership agreement provides that: (i) Profits would be shared by Sukesh and Vanita in the ratio of 3:2;(ii) 5% interest is to be allowed on capital;(iii) Vanita should be paid a monthly salary of Rs 600. The following balances are extracted from the books of the firm, on March 31, 2017. Sukesh Verma* Rs Rs Capital Accounts 40,000 40,000 Current Accounts (Cr.) 7,200 (Cr.) 2,800 Drawings 10,850 8,150 Net profit for the year, before charging interest on capital and after charging partner’s salary was Rs 9,500. Prepare the Profit and Loss Appropriation Account and the Partner’s Current Accounts. |
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Answer» Sukesh and Vanita were partners in a firm. Their partnership agreement provides that:
(i) Profits would be shared by Sukesh and Vanita in the ratio of 3:2; (ii) 5% interest is to be allowed on capital; (iii) Vanita should be paid a monthly salary of Rs 600.
The following balances are extracted from the books of the firm, on March 31, 2017.
Net profit for the year, before charging interest on capital and after charging partner’s salary was Rs 9,500. Prepare the Profit and Loss Appropriation Account and the Partner’s Current Accounts.
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