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M.168 An Aid to Accountancy—CBSE XII

PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2019 Cr.
Particulars ` Particulars `
To Interest on Capital A/cs (WN 1): By Profit and Loss A/c (Net Profit) 4,18,000
X (` 3,11,000 × 10/100) 31,100 (Transferred from Profit and Loss A/c)
Y (` 2,49,000 × 10/100) 24,900
Z (` 2,00,000 × 10/100) 20,000 76,000
To Profit transferred to:
X’s Capital A/c (` 3,42,000 × 57/120) 1,62,450
Y’s Capital A/c (` 3,42,000 × 43/120) 1,22,550
Z’s Capital A/c (` 3,42,000 × 20/120) 57,000 3,42,000
4,18,000 4,18,000

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Date Particulars X (`) Y (`) Z (`) Date Particulars X (`) Y (`) Z (`)

2018 2018
April 1 To Goodwill A/c 60,000 40,000 ... April 1 By Balance b/d 2,00,000 2,00,000 ...
2019 April 1 By Bank A/c ... ... 2,00,000
March 31 To Drawings A/c 1,00,000 80,000 50,000 April 1 By Premium for
March 31 To Balance c/d 4,04,550 3,16,450 2,27,000 Goodwill A/c 75,000 25,000 ...
April 1 By Revaluation
A/c 96,000 64,000 ...
2019
March 31 By Interest on
Capital A/c 31,100 24,900 20,000
By Profit and Loss
App. A/c 1,62,450 1,22,550 57,000
(Profit)
5,64,550 4,36,450 2,77,000 5,64,550 4,36,450 2,77,000

Working Notes:
1. Interest on Capital is calculated on the basis of capital as on 1st April, 2018, which is calculated as follows:
X = ` 2,00,000 + ` 75,000 + ` 96,000 – ` 60,000 = ` 3,11,000.
Y = ` 2,00,000 + ` 25,000 + ` 64,000 – ` 40,000 = ` 2,49,000.
Z = ` 2,00,000.
2. Calculation of New Profit-sharing Ratio:
24 –5 19
X = 3/5 – 1/8 = =
40 40
48 – 5 43
Y = 2/5 – 1/24 = =
120 120
Z = 1/6
Thus, New Profit-sharing Ratio of X, Y and Z = 19/40 : 43/120 : 1/6 = 57 : 43 : 20.