Question 8 Chapter 2 of Class 12 Part – 1
8. M , N and O were partners in a firm having capitals of Rs. 72,000; Rs. 72,000 and Rs. 96,000 respectively. Their Current Account balances were M: Rs. 12,000; N: Rs. 6,000 and O: Rs. 2, 400 According to the partnership deed, the partners were entitled to interest on capital @ 5% pa. O being the working partner was also entitled to a salary of Rs. 7,200 p.a. The profits w to be divided as follows:
(a) The first Rs. 24,000 in proportion to their capitals.
(b) Next Rs. 36,000 in the ratio of 5:3:2.
(c) Remaining profits to be shared equally.
The firm made a profit of Rs. 1,87,200 before charging any of the above items. Prepare the Profit and Loss Appropriation Account and pass necessary journal entry fr apportionment of profit.
The solution of Question 8 Chapter 2 of Class 12 Part – 1: –
Profit and Loss Appreciation Account
|To Interest on Capital A/c:||By Net Profit||1,87,200|
|To Salary To O||7,200|
|To Profit transferred to Current A/c:|
|Profit and Loss Appropriation A/c||Dr.||1,68,000|
|To M’s Current A/c||61,200|
|To N’s Current A/c||54,000|
|To O’s Current A/c||52,800|
|(Being profit appropriated among the partners)|
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