InvestorQ : a and b are the partner a is capital is 100000 and b is capital 60000 interest on capital is payable 6% per annum b is not getting sale of 3000 per month net profit for the year is 80000 prepare profit and loss appropriation account
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a and b are the partner a is capital is 100000 and b is capital 60000 interest on capital is payable 6% per annum b is not getting sale of 3000 per month net profit for the year is 80000 prepare profit and loss appropriation account

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Isha Tharwani answered.
2 years ago
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The profit and loss appropriation account are important for firms/partnership firms as it shows the allocation of profit among the partners or partner’s capital. This is not a Profit and loss account but is to be seen as an extension of it as it is prepared after preparing the P/L account.

So, its debit items include:
  • Loss from p/l account (if any)
  • Transfer of profits to reserves
  • Interest on capital
  • Salary paid to partners
  • Commission to partners
The credit side includes:
  • Profit from P/L account.
  • Drawing by partners and interest on it.
  • Money withdrawn from reserves.

The performance of your P/L appropriation account would be:

You can make corrections/adjustments for any other information as per the below details.


ParticularsAmountDateParticularsAmount
To Interest On Capital A/c:By Profit And Loss A/c (Profit transferred from P&L A/c)80,000
A’s Capital6,000
B’s Capital3,600
To B’s salary a/c36,000
To Profit transferred34,400
(Transfer to accounts of partners in their respective ratio, as decided)


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