Question

Rakhi and Shikha are partners in a firm, with capitals of Rs 2,00,000 and Rs 3,00,000 respectively. The profit of the firm, for the year ended 2006-07 is Rs 23,200. As per the partnership agreement, they share the profit in their capital ratio, after allowing a salary of Rs 5,000 per month to Shikha and interest on Partner's capital at the rate of 10% pa. During the year Rakhi withdrew Rs 7,000 and Shikha Rs 10,000 for their personal use. You are required to prepare profit and loss appropriation account and partner's capital accounts.

Answer 1

$\begin{array}{ccccccccc}\text{Dr}& & & & \text{Profit and Loss Appropriation Account}& & & & \text{Cr}\end{array}$

$\begin{array}{cccccc}\text{Particulars}& & \text{Amt. (Rs)}& \text{Particulars}& & \text{Amt. (Rs)}\\ \text{Shikha's Salary}& & 60,000& \text{Profit and Loss}& & 23,200\\ \text{Interest on Capital}& & & \text{Loss Transferred to}& & \\ \text{Rakhi}& 20,000& & \text{Rakhi's Capital A/c}& 34,720& \\ \text{Shikha}& \underset{–}{30,000}& \underset{–}{50,000}& \text{Shikha's Capital A/c}& \underset{–}{52,080}& \underset{–}{86,800}\\ & & \underset{–}{1,10,000}& & & \underset{–}{1,10,000}\end{array}$

$\begin{array}{cccccccccccc}& \text{Dr}& & & & & & \text{Partners' Capital Account}& & & & \text{Cr}\end{array}$

$\begin{array}{cccccc}\text{Particulars}& \text{Rakhi}& \text{Shikha}& \text{Particulars}& \text{Rakhi}& \text{Shikha}\\ \text{Drawings}& 7,000& 10,000& \text{Balance b/d}& 200,000& 300,000\\ \text{Profit and Loss}& 34,720& 52,080& \text{Partner's Salary}& -& 60,000\\ \text{Appropriation A/c}& & & & & \\ \text{Balance c/d}& 1,78,280& 3,27,920& \text{Interest on Capital}& 20,000& 30,000\\ & \underset{–}{\overline{2,20,000}}& \underset{–}{\overline{3,90,000}}& & \underset{–}{\overline{2,20,000}}& \underset{–}{\overline{3,90,000}}\end{array}$