Arun and Arora were partners in a firm sharing profits in the ratio of 5 : 3. Their fixed capitals on 1.4.2023 were : Arun ₹ 60,000 and Arora ₹ 80,000

Arun and Arora were partners in a firm sharing profits in the ratio of 5 : 3. Their fixed capitals on 1.4.2023 were : Arun ₹ 60,000 and Arora ₹ 80,000. They agreed to allow interest on capital @ 12% per annum and to charge on drawings @ 15% per annum. The profit of the firm for the year ended 31.3.2024 before all above adjustments were ₹ 12,600. The drawings made by Arun were ₹ 2,000 and by Arora ₹ 4,000 during the year. Prepare Profit and Loss Appropriation Account of Arun and Arora. Show your calculations clearly. The interest on capital will be allowed even if the firm incurs a loss.

[Ans. Share of Net Loss: Arun ₹ 2,344 and Arora ₹ 1,406.]