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Model Test Papers M.49

(vi) Non-current Assets comprises of following items:

(a) Fixed Assets;
(b) Non-current Investments;
(c) Deferred Tax Assets (Net);
(d) Long-term Loans and Advances;

(e) Other Non-current Assets.

2. (a) PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2019 Cr.
Particulars ` Particulars `
To General Reserve A/c (10% of ` 1,80,000) 18,000 By Profit and Loss A/c (Net Profit) 1,80,000
To Interest on Capital A/c: By Interest on Drawings A/c:
Anjan 15,000 Anjan (` 36,000 × 6.5/12 × 6/100) 1,170
Sooraj 12,500 27,500 Sooraj (` 36,000 × 6/12 × 6/100) 1,080
To Niranjan’s Salary A/c 60,000 Niranjan (` 36,000 × 5.5/12 × 6/100) 990 3,240
To Anjan’s Remuneration A/c (10% of ` 1,80,000) 18,000
To Sooraj’s Commission A/c 5,136
[10/110(` 1,80,000 – ` 18,000 – ` 27,500 –
` 60,000 – ` 18,000)]
To Profit transferred to:
Anjan’s Capital A/c 18,201
Sooraj’s Capital A/c 18,201
Niranjan’s Capital A/c 18,202 54,604
1,83,240 1,83,240

Working Notes: PROFIT AND LOSS ACCOUNT
1. Dr. for the year ended 31st March, 2019 Cr.
Particulars ` Particulars `

To Interest on Niranjan’s Loan A/c 15,000 By Net Profit before Adjustments 2,37,000
(` 5,00,000 × 6/100 × 6/12)
To Manager’s Salary A/c (` 2,000 × 12) 24,000
To Manager’s Commission A/c 18,000
[10/110 (` 2,37,000 – ` 15,000 – ` 24,000)]
To Net Profit transferred to Profit and Loss
Appropriation A/c 1,80,000
2,37,000 2,37,000

2. Interest on Partner’s Loan, Manager’s Salary and Commission are charge against the profit and not
appropriations of profits. Hence, these items have been debited to Profit and Loss Account and not to
Profit and Loss Appropriation Account.