Lalan and Balan were partners in a firm sharing profits in the ratio of 3:2. Their fixed capital on 1st April 2022 was: Lalan ₹ 10,00,000 and Balan ₹ 20,00,000. They agreed to allow interest on capital @ 12% p.a. and to charge on drawings @ 15% pa. The firm earned a profit, before all the above adjustments, of ₹ 3,00,000 for the year ended 31st March 2023. Drawings of Lalan and Balan during the year were ₹ 30,000 and ₹ 50,000 respectively. Showing your calculations, clearly prepare Profit and Loss Appropriation A/c of Lalan and Balan. The interest on capital will be allowed even if the firm incurs a loss.

Anurag Pathak Changed status to publish April 9, 2023
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