Dinesh and Sugumar entered into a partnership agreement on 1st January 2018, Dinesh contributing Rs. 1,50,000 and Sugumar Rs. 1,20,000 as capital. The agreement provided that:
1. Profits and losses to be shared in the ratio 2 : 1 as between Dinesh and Sugumar.
2. Partners to be entitled to interest on capital @ 4% p.a.
3. Interest on drawings to be charged Dinesh: Rs. 3,600 and Sugumar: Rs. 2,200
4. Dinesh to receive a salary of Rs. 60,000 for the year, and
5. Sugumar to receive a commission of Rs. 80,000
During the year ended on 31st December 2018, the firm made a profit of Rs. 2,20,000 before adjustment of interest, salary and commission.
Prepare the Profit and loss appropriation account.
