Profit and Loss Appropriation a/c
(for the year ended 31st March,2018)
Particulars |
Amount (Dr.) |
Particulars |
Amount (Cr.) |
To Interest on Capital:
- X
- Y
- Z |
50000
50000
25000 |
By Profit and Loss a/c
(after charging Z's salary) |
400000 |
To Profit transferred to:
- X's Capital a/c
- Y's Capital a/c
- Z's Capital a/c |
110000
110000
55000 |
|
|
|
400000 |
|
400000 |
Working Notes:
1. Salary to Z has not been debited to profit and loss appropriation accounts because profit of Rs. 4,00,000 is given after adjusting the Z's salary.
2. Calculation of interest on capital
Interest on X's capital = 5,00,000 × 10/100 = ₹50,000
Interest on Y's capital = 5,00,000 × 10/100 = ₹50,000
Interest on Z's capital = 2,50,000 × 10/100 = ₹25,000
3. Calculation of profit share of each Partner
Divisible of profit after interest on capital = Rs.4,00,000 -1,25,000 = 2,75,000
Profit sharing ratio = 2:2:1
X's profit share = 2,75,000 × 2/5 = ₹1,10,000
Y's profit share = 2,75,000 × 2/5 = ₹1,10,000
Z's profit share = 2,75,000 × 1/5 = ₹55,000