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On 1st January, 2010, Gavaskarand Iqbal entered into a partnership contributing capitals of 2 80,000 and 60,000 At the end of the year, net Probit amounted to 2 2,43,200 falling are the important clauses of the Partnership deed of the hinma (a) Interest on capital @67 Paper (b) Each partners is to get salary o 74.500 @ ) Gavaskar and Iqbal ane to share Prokits and losses as 3/5 and 2/5 d) Capital accounts are to be an bixed Capital System, e) Partners made their drawings at equal rate ob 22,000 per man Prepare probit & Lars Appropriation Fran the year ended 31st Dec, 2010 also the capital and current accoun at the year partners as​

Answer :

Answer:

Calculation of Profit & Loss Appropriation for the year ended 31st Dec, 2010:

Total Net Profit = Rs. 2,43,200

Interest on Capital:

Gavaskar's capital = Rs. 2,80,000

Iqbal's capital = Rs. 60,000

Interest on Gavaskar's capital = 2,80,000 * 6% = Rs. 16,800

Interest on Iqbal's capital = 60,000 * 6% = Rs. 3,600

Salary:

Gavaskar's salary = Rs. 74,500

Iqbal's salary = Rs. 74,500

Remaining Profit for distribution = Total Net Profit - Interest on Capital - Salary

= 2,43,200 - (16,800 + 3,600) - (74,500 + 74,500)

= Rs. 74,800

Proft sharing ratio:

Gavaskar's share = 3/5

Iqbal's share = 2/5

Profit for Gavaskar = Rs. 74,800 * 3/5 = Rs. 44,880

Profit for Iqbal = Rs. 74,800 * 2/5 = Rs. 29,920

Capital Accounts:

Gavaskar's capital:

Opening balance = Rs. 2,80,000

Add: Profit share = Rs. 44,880

Less: Salary drawn = Rs. 74,500

Closing balance = Rs. 2,50,380

Iqbal's capital:

Opening balance = Rs. 60,000

Add: Profit share = Rs. 29,920

Less: Salary drawn = Rs. 74,500

Closing balance = Rs. 15,420

Current Accounts:

Gavaskar:

Opening balance = 0

Add: Salary drawn = Rs. 74,500

Closing balance = Rs. 74,500

Iqbal:

Opening balance = 0

Add: Salary drawn = Rs. 74,500

Closing balance = Rs. 74,500

Therefore, the Profit & Loss Appropriation for the year ended 31st Dec, 2010 is as follows:

Gavaskar - Rs. 44,880

Iqbal - Rs. 29,920

Capital Accounts:

Gavaskar - Rs. 2,50,380

Iqbal - Rs. 15,420

Current Accounts:

Gavaskar - Rs. 74,500

Iqbal - Rs. 74,500

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