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M.366 An Aid to Accountancy—CBSE XII

7. PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2018 Cr.
Particulars ` Particulars `
To Profit transferred to: By Profit and Loss A/c (Net Profit) (Note 1) 15,050
Naman’s Capital A/c 7,525
Aman’s Capital A/c 7,525 15,050
15,050 15,050
Notes:
1. Interest on Naman’s Loan = ` 10,000 × 6/100 × 3/12 = ` 150.
Interest on Partner’s Loan is a charge against profit. Hence, it is debited to Profit and Loss Account. Thus, profit
transferred to Profit and Loss Appropriation Account would be ` 15,050 (i.e., ` 15,200 – ` 150).
2. Profit will be shared equally.
3. Interest on Capital will not be allowed.
8. Calculation of Subscription Income for the Year Ended 31st March, 2018:

Particulars `
Subscription Received during the year 2017–18 8,00,000
Add: Subscription for 2017–18 received in 2016–17 20,000
8,20,000
Less: (i) Subscription for 2016–17 received in 2017–18 50,000
(ii) Subscription for 2018–19 received in 2017–18 40,000 90,000
Subscription income for the year 2017–18 7,30,000

Alternatively: Subscription income can be calculated by preparing Subscription
Account as under:
Dr. SUBSCRIPTION ACCOUNT Cr.
Particulars ` Particulars `
To Subscription in Arrears A/c (Opening) 50,000 By Subscription Received in Advance A/c 20,000
To Income and Expenditure A/c (Bal. Fig.) 7,30,000 —For 2017–18
—Subscription Income for 2017–18 By Bank A/c 8,00,000
To Subscription Received in Advance(2018–19) 40,000
8,20,000 8,20,000

9. (i) JOURNAL OF AB LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
2018
April 1 Bank A/c ...Dr. 4,00,000
To Debentures Application A/c 4,00,000
(Being the application money received for 10,000 debentures)
Debentures Application A/c ...Dr. 4,00,000
To 10% Debentures A/c 4,00,000
(Being the application money transferred to 10% Debentures A/c)
Debentures Allotment A/c ...Dr. 5,20,000
Loss on Issue of Debentures A/c ...Dr. 1,30,000
To 10% Debentures A/c 6,00,000
To Premium on Redemption of Debentures A/c 50,000
(Being the issue of 10,000; 10% Debentures of ` 100 each at
8% discount and redeemable at 5% premium)
Bank A/c ...Dr. 5,20,000
To Debentures Allotment A/c 5,20,000
(Being the allotment money received)