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On 1st January 2005 Sneha and Surya started partnership business by contributing capitals of Rs. 50,000 and Rs. 60,000 respectively. They share profits in the ratio of 2 : 3. Sneha is entitled to a salary of Rs. 12,000 per annum. Interest on capital allowed is at 6% p.a. Surya is entitled to a commission of Rs. 3,000. During this year Sneha withdrew Rs. 3,000 and Surya Rs. 2,000. Interest on drawings charged is Rs. 100 and Rs. 150 respectively. Profit in the year before making the adjustments was Rs. 25,000. Pass necessary journal entries, Prepare Profit and Loss Appropriation Account and Partners Capital Accounts.

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Dr. Profit & Loss Appropriation Account Cr.

Dr. Partners Capital Account Cr.

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