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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Sajal and Kajal are partners sharing profits and losses in the ratio of 2 : 1. On 1st April, 2024, their capitals were: Sajal ₹5,00,000 and Kajal ₹4,00,000. Prepare the Profit & Loss Appropriation Account and the Partners’ Capital Accounts at the end of 31st March, 2025 from the following: (a) Interest on capital @ 5% p.a.; (b) Interest on the loan advanced by Kajal for the whole year, the loan being ₹3,00,000; (c) Interest on partners’ drawings @ 6% p.a. – Sajal ₹1,00,000 and Kajal ₹80,000; (d) 10% of the divisible profit is to be transferred to Reserve. Profit before giving effect to the above for the year ended 31st March, 2025 is ₹7,02,600.
Profit & Loss Account (for the year ended 31st March, 2025)
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Interest on Kajal’s Loan (3,00,000 × 6%) | 18,000 | By Net Profit | 7,02,600 |
| To Profit transferred to P & L Appropriation A/c | 6,84,600 | ||
| Total | 7,02,600 | Total | 7,02,600 |
Profit & Loss Appropriation Account (for the year ended 31st March, 2025)
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Interest on Capital (Sajal 25,000; Kajal 20,000) | 45,000 | By Profit & Loss A/c | 6,84,600 |
| To Reserve (10% of 6,45,000) | 64,500 | By Interest on Drawings (Sajal 3,000; Kajal 2,400) | 5,400 |
| To Profit transferred (Sajal 3,87,000; Kajal 1,93,500) | 5,80,500 | ||
| Total | 6,90,000 | Total | 6,90,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | Sajal | Kajal | Particulars (Cr.) | Sajal | Kajal |
|---|---|---|---|---|---|
| To Drawings A/c | 1,00,000 | 80,000 | By Balance b/d | 5,00,000 | 4,00,000 |
| To Interest on Drawings A/c | 3,000 | 2,400 | By Interest on Capital A/c | 25,000 | 20,000 |
| To Balance c/d | 8,09,000 | 5,31,100 | By P & L Appropriation A/c | 3,87,000 | 1,93,500 |
| Total | 9,12,000 | 6,13,500 | Total | 9,12,000 | 6,13,500 |
Working Note: Divisible profit for Reserve = ₹6,84,600 + ₹5,400 – ₹45,000 = ₹6,45,000; Reserve = ₹64,500. Profit for distribution = ₹6,45,000 – ₹64,500 = ₹5,80,500, shared 2 : 1.
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.52 - 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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