52:- Sajal and Kajal are partners sharing profits and losses in the ratio of 2:1. On 1st April, 2024 their capitals were: Sajal – Rs 5,00,000 and Kajal – Rs 4,00,000
Prepare profit and loss appropriation account and the partner’s capital accounts for the year ended 31st March 2025 from the following information:

  • Interest on capital is to be allowed @5% pa
  • Interest on the loan advanced by Kajal for the complete year, the amount of loan being Rs 3,00,000
  • Interest on partner’s drawings @6% pa. Drawings: Sajal Rs 1,00,000 and Kajal Rs 80,000
  • 10% of the divisible profits is to be transferred to general rese

Profit, before giving effect to the above, for the year ended 31st March 2024 is Rs 7,02,600.

Solution:-

WORKING NOTES :-

  • Calculation of Net Profit

Profit before providing interest on Partner’s loan                                7,02,600

Less : Interest on  Partner’s loan (3,00,000 X 6%)                                18,000

NET PROFIT                                                                                          6,84,600

  • Calculation of general reserve : 10% of divisible profit

Divisible profit = Net profit + Interest on drawings – Interest on capital
                          = 6,84,600 + 5,400 – 45,000
                          = Rs 6,45,000

General reserve = 6,45,000 x 10% = Rs 64,500