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X, Y and Z entered into partnership on 1st October, 2017 to share profits and losses in the ratio of 4 : 3 : 3. X, personally guaranteed that Z's share of profit after charging interest on capital 10% p.a. would not be less then ₹ 80,000 in any year. The capital contributions were: X–₹ 3,00,000, Y–₹ 2,00,000 and Z–₹ 1,50,000.The profit for the year ended 31st March, 2018 amounted to ₹ 1,60,000. Prepare Profit and Loss Appropriation Account.

Answer» X, Y and Z entered into partnership on 1st October, 2017 to share profits and losses in the ratio of 4 : 3 : 3. X, personally guaranteed that Z's share of profit after charging interest on capital 10% p.a. would not be less then ₹ 80,000 in any year. The capital contributions were: X–₹ 3,00,000, Y–₹ 2,00,000 and Z–₹ 1,50,000.

The profit for the year ended 31st March, 2018 amounted to ₹ 1,60,000. Prepare Profit and Loss Appropriation Account.


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