55:- Kabir, Zoravar and Parul are partners sharing profits in the ratio of 5:3:2. Their capitals as on 1st April, 2024 were: Kabir – Rs 5,20,000, Zoravar – Rs 3,20,000 and Parul – Rs 2,00,000.
The partnership deed provided as follows:
- Kabir and Zoravar each will get salary of Rs 24,000 p.a.
- Parul will get commission of 2% of net sales
- Interest on capital is to be allowed @5% p.a.
- Interest on drawings is to be charged @5% p.a.
- 10% of divisible profit is to be transferred to general reserve.
Net sales for the year ended 31st March, 2025 were Rs 50,00,000. Drawings by each of the partners during the year was Rs 60,000. Net profit for the year was 1,55,500.
Prepare profit and loss appropriation account for the year ended 31st March, 2025.
Solution:-
WORKING NOTES :-
The appropriations are more than the available profits , thus appropriation will be upto available profits in partner’s appropriation amount ratio.
