X and Y entered into partnership on 1st April, 2020. Their capitals as on 1st April, 2020 were ₹2,00,000 and ₹1,50,000 respectively. On 1st October, 2022, X gave ₹50,000 as loan to the firm. As per the provisions of the partnership Deed: (i) 20% of Profits before charging interest on Drawings but after making appropriations to be transferred to General Reserve. (ii) Interest on capital at 12% p.a. and Interest on Drawings @ 10% p.a. (iii) X to get monthly salary of ₹5,000 and Y to get salary of ₹22,500 per quarter. (iv) X is entitled to a commission of 5% on sales. Sales for the year were ₹3,50,000. (v) Profit to be shared in the ratio of their capitals up to ₹1,75,000 and balance equally. Profit for the year ended 31st March, 2023 before allowing or charging interest was ₹4,61,000. The drawings of X and Y were ₹1,00,000 and ₹1,25,000 respectively. Pass the necessary Journal entries relating to appropriation out of profit. Prepare Profit and Loss Appropriation Account and the Partners' Capital Accounts.

 X and Y entered into partnership on 1st April, 2020. Their capitals as on 1st April, 2020 were ₹2,00,000 and  ₹1,50,000 respectively. On 1st October, 2022, X gave  ₹50,000 as loan to the firm. As per the provisions of the partnership Deed:

(i) 20% of Profits before charging interest on Drawings but after making appropriations to be transferred to General Reserve.
(ii) Interest on capital at 12% p.a. and Interest on Drawings @ 10% p.a.
(iii) X to get monthly salary of   ₹5,000 and Y to get salary of   ₹22,500 per quarter.
(iv) X is entitled to a commission of 5% on sales. Sales for the year were  ₹3,50,000.
(v)  Profit to be shared in the ratio of their capitals up to ₹1,75,000 and balance equally.
Profit for the year ended 31st March, 2023 before allowing or charging interest was   ₹4,61,000. The drawings of X and Y were   ₹1,00,000 and  ₹1,25,000 respectively.
Pass the necessary Journal entries relating to appropriation out of profit. Prepare Profit and Loss Appropriation Account and the Partners' Capital Accounts.

 👇 Answer👇

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