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Question -

X, Y and Z are in Partnership, sharing profits and losses in the ratio of 3: 2: 1, respectively. Z’s share in the profit is guaranteed by X and Y to be a minimum of ₹ 8,000. The net profit for the year ended March 31, 2017 was ₹ 30,000. Prepare Profit and Loss Appropriation Account, indicating the amount finally due to each partner.



Answer -

Profit and Loss Appropriation Account as on March 31, 2017

 

Dr.

 

 

 

 

Cr.

 

Particulars

Amount

Particulars

Amount

Profit transferred to

 

 

Profit and Loss

 

30,000

X’s Capital

15,000

 

 

 

 

Less: Z’s Deficiency {3,000 × (3/5)}

(1,800)

13,200

 

 

 

 

 

 

 

 

 

 

 

Y’s Capital

10,000

 

 

 

 

Less: Z’s Deficiency {3,000 × (2/5)}

(1,200)

8,800

 

 

 

 

 

 

 

 

 

Z’s Capital

5,000

 

 

 

 

Add: Share of Deficiency born by

 

 

 

 

 

Radha

1,800

 

 

 

 

Mary

1,200

8,000

 

 

 

 

 

 

 

 

 

 

 

 

30,000

 

 

30,000

 

 

 

 

 

 

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