84. A, B and C are partners in a firm, sharing profits in the ratio of 2:1:1. It is agreed tha
on capital will be allowed at 5% per annum and interest on drawings will be charged at 4%
per annum. (No Interest will be charged or
allowed on Current Accounts.)
The following are the particulars of the Capital, Current and Drawings Accounts of the
partners.
A (*)
B ()
C()
Capital A/c (1st April, 2015)
75,000
40,000
30,000
Current A/c (1st April, 2015)
10,000
5,000
5,000
(Dr.)
Drawings
15,000
10,000
10,000
Interest on Drawings (31st March, 2016)
500
190
350
The Profit and Loss Account for the year ended 31st March, 2016 showed a net profit of
60,000 before taking into account interest on capital and drawings and subject to the
following adjustments:
(a) Life insurance premium of A amounting to
1,000 paid by the firm on 1st January,
2016 has been charged to Miscellaneous Expenditure Account.
(b) Travelling expenses of 3,000 of B for a pleasure trip to Kashmir paid by the firm on
30th September, 2015 has been debited to Travelling Expenses Account.
(c) Repairs to machinery amounting to 10,000 has been debited to Plant Account and
depreciation there on charged @20 %.
Prepare the Profit and Loss Appropriation Account for the year ending 31st March, 2016 and
Current Accounts of the partners for the year.

​