question_answer

The firm of Sonu and Monu earned a profit of Rs. 3,25,000 during the year ending on 31st March, 2016. They have decided to donate 10% of this profit to an NGO working for senior citizens. Pass necessary journal entry for the distribution of profits.

Answer:

                                                                        JOURNAL

Date	Particulars		LF	Amt (Dr)	Amt (Cr)
	Profit and Loss Appropriation A/c \[(3,25,000-32,500)\]	Dr		2,92,500
	To Sonu?s Capital A/c				1,46,250
	To  Monu?s Capital A/c				1,46,250
	(Being profit transferred to capital account)