Bhanu and Partap are partners sharings profits equally. Their fixed capitals as on 1st April, 2017 are $R s . 8, 00, 000$ and $R s . 10, 00, 000$ respectively. Their drawings during the year were $R s . 50, 000$ and $R s . 1, 00, 000$ respectively. Interest on Capital is a charge and is to be allowed @ 10% p.a. and interest on drawings is be charged @ 15% p.a. Profit for the year ended 31st March, 2018 was $R s . 1, 20, 000$ .
Prepare Profit and Loss Appropriation Account.

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Solution

Profit and Loss Appropriation a/c
(for the year ended 31st March, 2018)
Dr. Cr.
Particulars Amount Particulars Amount
To Interest on Capital
- Bhanu
- Partap
80000
100000 By Profit and Loss a/c 120000
By Interest on drawings-
- Bhanu
- Partap
7500
15000
By Loss transferred to
- Bhanu's Current a/c
- Partap's Current a/c
18750
18750
180000
180000

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Particulars	Amount	Particulars	Amount
To Interest on Capital - Bhanu - Partap	80000 100000	By Profit and Loss a/c	120000
		By Interest on drawings- - Bhanu - Partap	7500 15000
		By Loss transferred to - Bhanu's Current a/c - Partap's Current a/c	18750 18750
	180000		180000