Question 27 Chapter 2 of Class 12 Part - 1 VK Publication

Question 27 Chapter 2 of Class 12 Part – 1

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The solution of Question 27 Chapter 2 of Class 12 Part – 1: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

27. Somu and Monu are partners sharing profits and losses in the ratio of 4:1. Somu and Monu contributed capitals Rs. 4,00,000 and Rs. 3,00,000 in the firm respectively. The partners are entitled for salary Rs. 40,000 and Rs. 25,000 respectively. Profit before providing for appropriations was Rs. 60,000 for the year ended 31st March, 2018. Prepare profit and Loss Appropriation Account for the year ended 31st March, 2018. Interest on capital @5% is provided.

The solution of Question 27 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Appreciation Account

(For the year ended 31st March, 2018)

Particulars	Amount	Particulars	Amount
To Sonu’s Capital A/c	36,000	By Profit and Loss A/c	60,000
To Sonu’s Capital A/c	24,000
	60,000		60,000

Working Notes:
Interest on Capitals:
Sonu = 4,00,000 x 5/100 = Rs. 20,000; Monu = 3,00,000 × 5/100 = Rs. 15,000
Salaries of Partners:
Sonu = Rs. 40,000, Monu = Rs. 25,000
Total amount of appropriations is Rs. 1,00,000 (i.e., 20,000 + 15,000 + 40,000 + 25,000)
Profit for the year is Rs. 60,000.
Therefore, the available profit is distributed in the ratio of appropriations to be made to Sonu and Monu.
Sonu = 20,000+ 40,000 = Rs. 60,000.
Monu = 15,000+25,000 = Rs. 40,000
Ratio of appropriations to be made to Sonu and Monu = 60,000: 40,000 or 3 : 2.

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