Question

Bhanu and Partab are partners sharings profits equally. Their fixed capitals as on 1st April, 2018 are ₹ 8,00,000 and ₹ 10,00,000 respectively. Their drawings during the year were ₹ 50,000 and ₹ 1,00,000 respectively. Interest on Capital is a charge and is to be allowed @ 10% p.a. and interest on drawings is to be charged @ 15% p.a. Net Profit for the year ended 31st March, 2019 was ₹ 1,20,000.
Prepare Profit and Loss Appropriation Account.

Answer 1

Profit and Loss Appropriation Account for the year ended March 31, 2019
Dr.							Cr.
Particulars			Amount (₹)	Particulars		Amount (₹)
Interest on Capital A/c:				Profit and Loss A/c		1,20,000
Bhanu’s Current A/c		80,000		Interest on Drawings A/c:
Partap’s Current A/c		1,00,000	1,80,000	Bhanu’s Current A/c	3,750
				Partap’s Current A/c	7,500	11,250
				Loss transferred to
				Bhanu’s Current A/c	24,375
				Partap’s Current A/c	24,375	48,750
			1,80,000			1,80,000