Ravi and Tiku are partners in a firm. According to their partnership deed :
(i) Interest on capital will be allowed @ 5% per annum.
(ii) Interest on drawings will be charged @ 4% per annum.
(iii) Each partner will be given a salary of Rs 1,000 per month.
(iv) Partners will share profits and losses in the ratio of 2 : 1.
Following are the particulars of the capitals and drawings of the partners :
Ravi had taken a loan of Rs 10,000 from the firm on which interest of Rs 200 was due by him to the firm.
The accounts for the year 2017-18 showed that the firm had made a profit of Rs 77,000 before taken into account any interest, partners’ salaries and manager’s salary of Rs 18,000.
You are required to prepare :
- Profit and Loss Appropriation Account for the year 2017-18.
- Partners’ Capital Accounts.
