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Question -

Amann, Babita and Suresh are partners in a firm. Their profit sharing ratio is 2:2:1. Suresh is guaranteed a minimum amount of тВ╣ 10,000 as share of profit, every year. Any deficiency on that account shall be met by Babita. The profits for two years ending March 31, 2016 and March 31, 2017 were тВ╣ 40,000 and тВ╣ 60,000, respectively. Prepare the Profit and Loss Appropriation Account for the two years.



Answer -

Profit and Loss Appropriation Account for the year ended┬а31st31st┬аMarch 2016

Dr.

┬а

┬а

┬а

┬а

Cr.

Particulars

Amount

тВ╣

Particulars

Amount

тВ╣

Profit transferred to

┬а

Profit and Loss

40,000

AmannтАЩs┬аCapital┬а 16,000

16,000

┬а

┬а

BabitaтАЩs┬аCapital (16,000 тАУ 2,000)

14,000

┬а

┬а

SureshтАЩs Capital (8,000 + 2,000)

10,000

┬а

┬а

┬а

┬а

┬а

┬а

┬а

40,000

┬а

40,000

┬а

┬а

┬а

┬а

┬а

Profit and Loss Appropriation Account for the year ended┬а31st┬аMarch┬а2017

Dr.

┬а

┬а

┬а

┬а

Cr.

Particulars

Amount

тВ╣

Particulars

Amount

тВ╣

Profit transferred to

┬а

Profit and Loss

60,000

AmannтАЩs┬аCapital┬а

24,000

┬а

┬а

BabitaтАЩs┬аCapital

24,000

┬а

┬а

SureshтАЩs Capital

12,000

┬а

┬а

┬а

┬а

┬а

┬а

┬а

60,000

┬а

60,000

┬а

┬а

┬а

┬а

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