question_answer
Karan and Kartik are partners in a firm sharing profits and losses in the ratio of 3 : 2. The balances in their capital and current accounts as on 1st April, 2017 were as under: | Items | Karan (Rs.) | Kartik (Rs.) |
| Capital accounts | 3,00,000 | 2,00,000 |
| Current accounts (Cr) | 1,00,000 | 80,000 |
The partnership deed provides that Karan is to be paid salary @ Rs. 500 per month whereas, Kartik is to get a commission of Rs. 40,000 for the year. Interest on capital is to be credited at 6% per annum. The drawings of Karan and Kartik for the year were Rs. 30,000 and Rs. 10,000, respectively. The net profit of the firm before making these adjustments was Rs. 2,49,000. Interest on Karan's drawings was Rs. 750 and Kartik's drawings was Rs. 250. Prepare profit and loss appropriation account and partners' capital and current accounts.
Answer:
Profit and Loss Appropriation Account Dr for the year ending 31st March, 2017 Cr | Particulars | | Amt (Rs.) | Particulars | | Amt (Rs.) |
| To Karan's Current A/c (Salary) \[\left( 500\times 12 \right)\] | | 6,000 | By Net Profit as per Profit and Loss A/c | | 2,49,000 |
| To Kartik's Current A/c (Commission) | | 40,000 | By Interest on Drawings | | |
| To Interest on Capital | | | Karan?s Current A/c | 750 | |
| Karan's Current A/c | 18,000 | | Kartik?s Current A/c | 250 | 1,000 |
| \[\left( 3,00,000\times 6/100 \right)\] | | | | | |
| Kartik's Current A/c | 12,000 | 30,000 | | | |
| \[\left( 2,00,000\times 6/100 \right)\] | | | | | |
| To Profit Transferred to | | | | | |
| Karan's Current A/c | 1,04,00 | | | | |
| Kartik's Current A/c | 69,600 | 1,74,000 | | | |
| | | 2,50,000 | | | 2,50,000 |
Dr Partners' Capital Account Cr | Particulars | Karan (Rs.) | Kartik (Rs.) | Particulars | Karan (Rs.) | Kartik (Rs.) |
| To Balance c/d | 3,00,000 | 2,00,000 | By Balance b/d | 3,00,000 | 2,00,000 |
| | 3,00,000 | 2,00,000 | | 3,00,000 | 2,00,000 |
Dr Partners' Current Account Cr | Particulars | Karan (Rs.) | Kartik (Rs.) | Particulars | Karan (Rs.) | Kartik (Rs.) |
| To Drawings A/c | 30,000 | 10,000 | By Balance b/d | 1,00,000 | 80,000 |
| To Interest on Drawings A/c | 750 | 250 | By Salary A/c | 6,000 | - |
| To Balance c/d | 1,97,650 | 1,91,350 | By Commission A/c | - | 40,000 |
| | | | By Interest on Capital A/c | 18,000 | 12,000 |
| | | | By Profit and Loss | | |
| | | | Appropriation A/c | 1,04,400 | 69,600 |
| | 2,28,400 | 2,01,600 | | 2,28,400 | 2,01,600 |
