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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Amit and Vijay started a partnership business on 1st April, 2024. Their capital contributions were ₹2,00,000 and ₹1,50,000 respectively. The Partnership Deed provided as follows: (a) Interest on capital to be allowed @ 10% p.a.; (b) Amit to get a salary of ₹2,000 per month and Vijay ₹3,000 per month; (c) Profits to be shared in the ratio of 3 : 2. Net profit for the year ended 31st March, 2025 was ₹2,16,000. Interest on drawings amounted to ₹2,200 for Amit and ₹2,500 for Vijay. 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) | 2,16,000 | |
| Amit’s Capital A/c | 20,000 | By Interest on Drawings: | |
| Vijay’s Capital A/c | 15,000 | Amit’s Capital A/c | 2,200 |
| To Salary: | Vijay’s Capital A/c | 2,500 | |
| Amit (₹2,000 × 12) | 24,000 | ||
| Vijay (₹3,000 × 12) | 36,000 | ||
| To Profit transferred to Capital A/cs: | |||
| Amit (1,25,700 × 3/5) | 75,420 | ||
| Vijay (1,25,700 × 2/5) | 50,280 | ||
| Total | 2,20,700 | Total | 2,20,700 |
Working Note: Divisible profit = ₹2,16,000 + ₹4,700 (interest on drawings) – ₹35,000 (interest on capital) – ₹60,000 (salary) = ₹1,25,700, shared in 3 : 2.
Accounting & Commerce Educator
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.47 - 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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