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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Vinod and Mohan are partners. Vinod’s capital is ₹1,00,000 and Mohan’s capital is ₹60,000. Interest on capital is payable @ 6% p.a. Mohan is entitled to a salary of ₹3,000 per month. Profit for the current year before interest and salary to Mohan is ₹80,000. Prepare the Profit & Loss Appropriation Account.
Profit & Loss Appropriation Account (for the year ended 31st March, 2025)
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Interest on Capital: | By Profit & Loss A/c (Net Profit) | 80,000 | |
| Vinod’s Capital A/c | 6,000 | ||
| Mohan’s Capital A/c | 3,600 | ||
| To Salary to Mohan (₹3,000 × 12) | 36,000 | ||
| To Profit transferred to Capital A/cs: | |||
| Vinod (34,400 × 1/2) | 17,200 | ||
| Mohan (34,400 × 1/2) | 17,200 | ||
| Total | 80,000 | Total | 80,000 |
Working Notes:
Interest on capital: Vinod = ₹1,00,000 × 6/100 = ₹6,000; Mohan = ₹60,000 × 6/100 = ₹3,600.
Divisible profit = ₹80,000 – ₹9,600 (interest) – ₹36,000 (salary) = ₹34,400, shared equally = ₹17,200 each.
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Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 1 Q.14 - Accounting for Partnership Firm Fundamentals", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Accounting for Partnership Firm – Fundamentals.
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