Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3:2. Their fixed capitals as on 1st April, 2016, were Rs 6,00,000 and Rs 4,00,000 respectively.
Their partnership deed provides for the following :
(a) Partners are to be allowed interest on their capital @ 10% per annum.
(b) They are to be charged interest on drawings @ 4% per annum.
(c) Asif is entitled to a salary of Rs 2.000 per month.
(d) Ravi is entitled to a commission of 5% of the correct net profit of the firm before charging such commission.
(e) Asif is entitled to a rent of Rs 3,000 per month for the use of his premises by the firm.
The net profit of the firm for the year ended 31 st March, 2017, before providing for any of the above clauses was Rs 4,00,000. Both partners withdrew Rs 5,000 at the beginning of every month for the entire year.
You are required to prepare a Profit and Loss Appropriation Account for the year ended 31st March, 2017.
