22 :- Simran and Reema are partners sharing profits in the ratio of 3 : 2. Their capitals as on 1st April, 2024 were Rs 2,00,000 each whereas Current Accounts had balances of Rs 50,000 and Rs 25,000 respectively. Interest on capital is to be allowed @ 5% p.a. Net Profit of the firm for the year ended 31st March, 2025 was Rs 3,00,000.
Pass the Journal entries for interest on capital and distribution of profit. Also prepare Profit and Loss Appropriation Account for the year.
Solution :-
