Simmi and Sonu are partners in a firm, sharing profits and losses in the ratio of 3:1. The profit and loss account of the firm for the year endingMarch 31, 2006 shows a net profit of Rs. 1,50,000.
Prepare the Profit and Loss Appropriation Account by taking into consideration the following information:
(i) Partners capital on April 1, 2005; Simmi, Rs. 30,000; Sonu, Rs. 60,000;
(ii) Current accounts balances on April 1, 2005; Simmi, Rs. 30,000 (cr.); Sonu, Rs. 15,000 (cr.);
(iii) Partners drawings during the year amounted to Simmi, Rs. 20,000; Sonu, Rs. 15,000;
(iv) Interest on capital was allowed @ 5% p.a.;
(v) Interest on drawing was to be charged @ 6% p.a. at an average of six months;
(vi) Partners’ salaries : Simmi Rs. 12,000 and Sonu Rs. 9,000. Also show the partners’ current accounts.