Lalan and Balan were partners in a firm sharing profits in the ratio of 3 : 2. Their fixed capitals on 1st April, 2023 were : Lalan ₹ 1,00,000 and Balan ₹ 2,00,000. They agreed to allow interest on capital @ 12% per annum and to charge on drawings @ 15% per annum. The firm earned a profit, before all above adjustments, of ₹ 30,000 for the year ended 31st March, 2024. The drawings of Lalan and Balan during the year were ₹ 3,000 and ₹ 5,000 respectively. Showing you calculations clearly, prepare Profit and Loss Appropriation Account of Lalan and Balan. The interest on capital will be allowed even if the firm incurs a loss.

[Ans. Net Loss transferred to Lalan’s Current Account ₹ 3,240 and Balan’s Current Account ₹ 2,160.]

Anurag Pathak Answered question May 25, 2024
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