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1.20                                     Double Entry Book Keeping (Section A)—ISC XII

                     Working Notes:

                     1. Calculation of Interest on Capitals:
                     Partner  Interest on Capitals                                               Total (`)
                       Karan  On ` 2,00,000 @ 10% for 1 year + On ` 6,00,000 @ 10% for 6 months    50,000
                       Hari   On ` 6,00,000 @ 10% for 6 months + On ` 5,00,000 @ 10% for 6 months   55,000
                       Ashish  On ` 3,00,000 @ 10% for 1 year                                      30,000
                           Total                                                                 1,35,000


                     2. Calculation of Interest on Drawings:
                     Partner  Interest on Drawings                                               Total (`)

                       Karan  On ` 50,000 @ 15% for 9 months  + On ` 90,000 @ 15% for 6 months  + On ` 1,00,000 @ 15% for 3 months  16,125
                       Hari   On ` 80,000 @ 15% for 9 months + On ` 80,000 @ 15% for 6 months + On ` 80,000 @ 15% for 3 months   18,000
                       Ashish  On ` 90,000 @ 15% for 9 months + On ` 30,000 @ 15% for 6 months + On ` 60,000 @ 15% for 3 months   14,625
                           Total                                                                   48,750

                     Illustration 17.
                     Sachin and Saurabh are partners in a firm. Their profit-sharing ratio is 3 : 2. On 1st April,
                     2019, their Capital and Current Account balances were:
                     Partners                                               Capital Account   Current Account
                                                                                 `              `
                     Sachin                                                   2,00,000       50,000
                     Saurabh                                                  1,00,000       20,000

                     The partners are entitled to interest on capital @ 10% p.a. on monthly basis. They are also
                     allowed to make withdrawals at any time during the year but they have agreed to charge
                     interest on drawings @ 10% p.a. also on monthly basis.
                     The withdrawals of the partners were as under:

                     Partners                                               1st July, 2019 (`)  1st January, 2020 (`)

                     Sachin                                                    10,000        18,000
                     Saurabh                                                    8,000         4,000

                     On  1st  October,  2019  Sachin  took  an  old  furniture  from  the  firm  at  a  value  of
                     ` 40,000 and Saurabh introduced in the business another furniture valued at ` 25,000.
                     On 1st January, 2020 Sachin introduced some stock into the business valued at ` 20,000.
                     On  1st  February,  2020  Saurabh  took  some  stock  from  the  business  for  his  personal  use
                     valued at ` 5,000.
                     The net profit for the year ended 31st March, 2020 was ` 70,000.

                     Prepare  Profit  and  Loss  Appropriation  Account  for  the  year  ended  31st  March,  2020  and
                     Partners’ Capital and Current Accounts.
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