ACCOUNTING FOR PARTNERSHIP FIRMS - FUMRAMENTALS and interest on drawings will be charged
The following are the particulars of the Capital, Current and Dramings Accounts of the partners :
The draft accounts for the year ending 31.3.2022 showed a net profit of \( ₹ 1,20,000 \) before taking into account interest on Capital and drawings and subject to following rectification of errors :
(1) Life insurance premium of \( A \) amounting to \( ₹ 1,500 \) paid by the firm on 31 st March, 2022 has been charged to Miscellaneous Expenditure Account.
(2) Repairs of machinery amounting to ₹20,000 has been debited to Plant Account and depreciation thereon charged@20 per cent.
(3) An item in the inventory was valued at ₹ 45,000 but was subsequently found to be worth ₹30,000 only.
You are required to prepare the Profit \& Loss Appropriation Account for the year ended 31st March, 2022 and the Partner's Current Accounts for the year.
[Ans. Divisible Profits ₹77,980; Current A/cs : \( A ₹ 33,990( Cr .) ; B ₹ 13,215( Cr \).) and \( C \) ₹ 8,205 (Dr.).]
