Question

Anwar, Biswas and Divya are partners in a firm. Their Capital Accounts stood at : $Rs.8,00,000;Rs.6,00,000$ and $Rs.4,00,000$ respectively on 1st April, 2013. They shared profits and losses in the ratio of $3:2:1$ respectively. Partners are entitled to interest on capital @ $6\%$ per annum and salary to Biswas and Divya @ $Rs.4,000$ per Month and $Rs.6,000$ per quarter respectively as per the provisions of Partnership Deed.
Biswas's share of profit including interest on capital but excluding salary is guaranteed at a minimurn of $Rs.82,000$ p.a. Any deficiency arising on that account shall be met by Divya. Profit for the year ended. 31st March, 2014 amounted to $Rs.3,12,000$. Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2014.

Answer 1

Notes:- Biswa's share includes share of profit and interest on capital

Share of profit = 44,000

Add;Interest on capital= 36,000

Total = 80,000

Guaranteed amount = 82,000

The deficiency of 2000 is to be borne by Divya.

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars	Amount	Particulars	Amount
To Interest on capital Anwar- 8,00,000*6%=48,000 Biswas-6,00,000*6%=36,000 Divya-4,00,000*6%=24,000	1,08,000	By net profit	3,12,000
To Partner's salary A/c Biswas-4000*12 = 48,000 Divya-6000*4 = 24,000	72,000
To Profit Transferred to Anwar's capital A/c- 66000 Biswa's capital A/c -44,000 Add:-Divya's share 2000 Divya = 22,000 Less:deficiency cont =(2000)	1,26,000
Total	3,12,000	Total	3,12,000