X and Y entered into partnership on 1st April, 2017 and contributed ₹ 2,00,000 and ₹ 1,50,000 respectively as their capitals. On 1st October, 2017, X provided ₹ 50,000 as loan to the firm. As per the provisions of the partnership Deed: (i) 20% of Profits before charging interest on Drawings but after making appropriations to be transferred to General Reserve. (ii) Interest on capital at 12% p.a. and Interest on Drawings @ 10% p.a. (iii) X to ger monthly salary of ₹ 5,000 and Y to get salary of ₹ 22,500 per quarter. (iv) X is entitled to a commission of 5% on sales. Sales for the year were ₹ 3,50,000. (v) Profit and Loss to be shared in the ratio of their capital contribution up to ₹ 1,75,000 and above ₹ 1,75,000 equally. The profit for the year ended 31st March, 2018 before providing for any interest was ₹ 4,61,000. The drawings of X and Y were ₹ 1,00,000 and ₹ 1,25,000 respectively. Pass the necessary Journal entries relating to appropriation our of profit and Loss Appropriation Account and the Partners Capital Accounts.

X and Y entered into partnership on 1st April, 2017 and contributed �

1.	X and Y entered into partnership on 1st April, 2017 and contributed ₹ 2,00,000 and ₹ 1,50,000 respectively as their capitals. On 1st October, 2017, X provided ₹ 50,000 as loan to the firm. As per the provisions of the partnership Deed: (i) 20% of Profits before charging interest on Drawings but after making appropriations to be transferred to General Reserve. (ii) Interest on capital at 12% p.a. and Interest on Drawings @ 10% p.a. (iii) X to ger monthly salary of ₹ 5,000 and Y to get salary of ₹ 22,500 per quarter. (iv) X is entitled to a commission of 5% on sales. Sales for the year were ₹ 3,50,000. (v) Profit and Loss to be shared in the ratio of their capital contribution up to ₹ 1,75,000 and above ₹ 1,75,000 equally. The profit for the year ended 31st March, 2018 before providing for any interest was ₹ 4,61,000. The drawings of X and Y were ₹ 1,00,000 and ₹ 1,25,000 respectively. Pass the necessary Journal entries relating to appropriation our of profit and Loss Appropriation Account and the Partners Capital Accounts.
Answer» essary JOURNAL entries relating to appropriation our of profit and Loss Appropriation Account and the Partners Capital Accounts are GIVEN below:Explanation:Calculation of Reserve:Profit before charging INTEREST on DRAWINGS but after making APPROPRIATIONS Reserve Thus, the Reserve amount will be of Rs. 50,000.Division of Profits:The Profit division among the Partners X and Y are calculated below:The profit of Partner X will be of Rs. 1,18,125 and the profit of Partner Y will be of Rs. 93,125.

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