Q.No.5 Mr. A and Mr. B start a business on 01st June ,2021, with capital of 2,570,000 and 800,000. According to agreement Mr. A is entitled for a salary of 250,000 whereas another partner is entitled for Rs. 46,000. Partners borrowed some amount of loan from a financial institution of Rs. 300,000 at 12% interest rate. The interest on capital 7.5% p.a is allowed to partner B. During their first fiscal year of partnership, they earned a net profit of Rs. 1,650,000. Required: Profit and Loss appropriation account to allocate the profit with 3:2 to partners A and B respectively. Provide necessary journal entries. Moreover, also prepare a capital account for the partnership.

Q.No.5 Mr. A and Mr. B start a business on 01st June ,2021, with capital of 2,570,000 and 800,000. According to agreement Mr. A is entitled for a salary of 250,000 whereas another partner is entitled for Rs. 46,000. Partners borrowed some amount of loan from a financial institution of Rs. 300,000 at 12% interest rate. The interest on capital 7.5% p.a is allowed to partner B. During their first fiscal year of partnership, they earned a net profit of Rs. 1,650,000. Required: Profit and Loss appropriation account to allocate the profit with 3:2 to partners A and B respectively. Provide necessary journal entries. Moreover, also prepare a capital account for the partnership.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q.No.5 Mr. A and Mr. B start a business on 01st June ,2021, with
capital of 2,570,000 and 800,000. According to agreement Mr. A
is entitled for a salary of 250,000 whereas another partner is
entitled for Rs. 46,000. Partners borrowed some amount of loan
from a financial institution of Rs. 300,000 at 12% interest rate.
The interest on capital 7.5% p.a is allowed to partner B. During
their first fiscal year of partnership, they earned a net profit of Rs.
1,650,000.
Required:
Profit and Loss appropriation account to allocate the profit with
3:2 to partners A and B respectively. Provide necessary journal
entries. Moreover, also prepare a capital account for the
partnership.

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