1
Question
X, Y and Z entered into partnership on 1st October, 2017 to share profits and losses in the ratio of 4 : 3 : 3. X, personally guaranteed that Z's share of profit after charging interest on capital @ 10% p.a. would not be less then ₹ 80,000 in any year. The capital contributions were: X–₹ 3,00,000, Y–₹ 2,00,000 and Z–₹ 1,50,000.
The profit for the year ended 31st March, 2018 amounted to ₹ 1,60,000. Prepare Profit and Loss Appropriation Account.
The profit for the year ended 31st March, 2018 amounted to ₹ 1,60,000. Prepare Profit and Loss Appropriation Account.
Open in App
Solution
Profit and Loss Appropriation Account
for the year ended March 31, 2018
Dr.
Cr.
Particulars
Amount
(Rs)
Particulars
Amount
(Rs)
Interest on Capital:
Net Profit b/d
1,60,000
X
15,000
Y
10,000
Z
7,500
32,500
Profit transferred to:
X (51,000 – 1,750)
49,250
Y (38,250)
38,250
Z (38,250 + 1,750)
40,000
1,27,500
1,60,000
1,60,000
Note: Since Z is admitted on 1st October, 2017 and Profit is ascertained on March 31, 2018, therefore, interest on capital is calculated for 6 months and guaranteed amount is considered as Rs 40,000 (half of the total amount).
|
Profit and Loss Appropriation Account for the year ended March 31, 2018 |
||||
|
Dr. |
|
Cr. |
||
|
Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
|
|
Interest on Capital: |
|
Net Profit b/d |
1,60,000 |
|
|
X |
15,000 |
|
|
|
|
Y |
10,000 |
|
|
|
|
Z |
7,500 |
32,500 |
|
|
|
|
|
|
|
|
|
Profit transferred to: |
|
|
|
|
|
X (51,000 – 1,750) |
49,250 |
|
|
|
|
Y (38,250) |
38,250 |
|
|
|
|
Z (38,250 + 1,750) |
40,000 |
1,27,500 |
|
|
|
|
1,60,000 |
|
1,60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Since Z is admitted on 1st October, 2017 and Profit is ascertained on March 31, 2018, therefore, interest on capital is calculated for 6 months and guaranteed amount is considered as Rs 40,000 (half of the total amount).
Suggest Corrections
82
Similar questions