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Kabir, Zoravar and Parul are partners sharing profits in the ratio of 5:3:2. Their capitals as on 1st April, 2019were: Kabir - 5,20,000, Zoravar- 3,20,000 and Parul- 2,00,000.The Partnership Deed provided as follows:(1) Kabir and Zoravar each will get salary of 24,000 p.a.(ii) Parul will get commission of 2% of Sales.(iii) Interest on capital is to be allowed @ 5% p.a.(iv) Interest on Drawings is to be charged @ 5% p.a.(v) 10% of Divisible Profit is to be transferred to General Reserve.Sales for the year ended 31st March, 2020 were 50,00,000. Drawings by each of the partners during theyear was 60,000. Net Profit for the year was 1,55,500.Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2020. |
Answer» PROFIT and Loss Appropriation A/c for the year ended 31.3.2020Explanation: P&L Appropriation A/c Particulars Amount(RS.) Particulars Amount(Rs.) To SALARY to: By NET Profit 1,55,500 KABIR 24,000 By Drawings 1,80,000 Zoravar 24,000 (W.N.3) By Interest on 9,000 To Sales Comm. 1,00,000 Drawings(W.N 3) to Parul(W.N 1) To Interest on 52,000 Capital(W.N 2) To General 15,550 Reserve(10%) To Partner A/c- (5:3:2) Kabir 64475 Zoravar 38685 Parul 25790
344500 344500
Working Notes: 1)Calculation of Sales Commission to Parul = Rs.50,00,000 x 2% = Rs.1,00,000 2) Calculation of Interest on Capital = (5,20,000 x 5%) + (3,20,000 x 5%) + (2,00,000 x 5%) = 52,000 3) Calculation of Drawings and Interest on drawings a) Drawings = 60,000 x 3 = Rs.1,80,000 b) Interest on Drawings = 1,80,000 x 5% = 9,000 |
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