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Standard XII
Accountancy
Profit or Loss Appropriation A/c
Which of the ...
Question

Which of the following is a credit to profit & loss appropriation account?


A

Salaries

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B

Interest on drawings

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C

Interest on capital

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D

Remuneration

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Solution

The correct option is B

Interest on drawings


Interest on drawings is a credit to profit & loss appropriation account.


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Q. If interest on capital, salary to the partner and share of profit are credited while interest on drawings, drawings and share of loss are debited to the Partners' Capital Accounts, what is the method followed to maintain the Capital Accounts?
Q. Interest on capital is given from profit and loss appropriation account to a partner __________________.
Q.

In the absence of partnership deed, specify the rules relating to the following

(i) Sharing of profits and losses (ii) Interest on partner's capital

(iii) Interest on partner's drawings (iv) Interest on partner's loan

(v) Salary to a partner

Q. X, Y & Z are partners. X withdraws fixed some at the beginning of each month. Rate of interest on drawing is 10% p.a. Interest on drawing credited to Profit & Loss Appropriation A/c is Rs. 650. Calculate the monthly drawing of partner X.
Q. Suresh, Sahil and Sumit are partners sharing profits in the ratio of 5:3:2. During the year ended 31st March, 2018, the firm earned profit of Rs.3,50,000. Prepare Profit and Loss Appropriation Account giving effect to the following:
(i) Each of the partner is to get remuneration of Rs.60,000 p.a.
(ii) Interest on Capital is to be allowed @ 10% p.a. Capitals of Suresh, Sahil and Sumit as on 1st April, 2017 were - Rs.5,00,000;Rs.5,00,000 and Rs.50,000 respectively.
(iii) Interest on Drawings charged was: Suresh- Rs.10,000; Sahil - Rs.20,000; and Sumit - Rs. 25,000.
(iv) Sumit is guaranteed minimum profit of Rs.1,50,000 after above appropriations.
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