The partnership agreement of Rohit, Ali and Sneh provides that:
1. Profits will be shared by them in the ratio of 2 : 2 : 1.
2. Interest on capital to be allowed at rate of 6% per annum.
3. Interest on drawings to be charged at the rate of 3% per annum.
4. Ali to be given a salary of Rs 500 per month.
5. Ali’s guarantee to the firm that the firm would earn a net profit of at least ? 80,000 per annum and any shortfall in these profits would be personally met by him.
The capitals of the partners on 1st April, 2013, were :
Rohit: Rs 1,20,000;
Ah: Rs 1,00,000;
Sneh: Rs 1,00,000.
During the financial year 2013-14, all the three partners withdrew Rs 1,000 each at the beginning of every month.
The net profit of the firm for the year 2013-14 was Rs 70,000.
You are required to prepare for the year 2013-13;
(i) Profit and Loss Appropriation Account
(ii) Partner’s Capital Accounts.