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Model Test Papers M.37

9. PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2018 Cr.

Particulars ` Particulars `

To Interest on Capital @ 5% p.a.: By Profit and Loss A/c (Net Profit) 69,100
X 2,500 By Interest on Drawings A/c:
Y 2,000 4,500 X 120
To Salary A/c: Y 80 200
X 24,000
Y 12,000 36,000
To Divisible Profit transferred to Capital A/cs:
X (3/5) 17,280
Y (2/5) 11,520 28,800
69,300 69,300

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

To Drawings A/c 6,000 4,000 By Balance b/d (WN 2) 50,000 40,000
To Interest on Drawings A/c 120 80 By Interest on Capital A/c 2,500 2,000
To Balance c/d 87,660 61,440 By Salary A/c 24,000 12,000
By Profit and Loss Appropriation A/c 17,280 11,520
93,780 65,520 93,780 65,520

Working Notes:
1. Calculation of divisible profit, Y’s Share of Profit and Profit for the Year:
(a) As X’s Share of Profit is 3/5 and his share is ` 17,280

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So, Total Divisible Profit of the Firm = ` 17,280 × = ` 28,800
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2
Y’s Share of Profit will be = ` 28,800 × = ` 11,520.
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(b) Net Profit as per Profit and Loss A/c = ` 69,300 – ` 200 = ` 69,100.
2. Calculation of Partners’ Capitals:
(a) Interest on X’s Capital @ 5% = ` 2,500
100
So, X’s Capital = ` 2,500 × = ` 50,000.
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(b) Interest on Y’s Capital @ 5% = ` 2,000
100
Y’s Capital = ` 2,000 × = ` 40,000.
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3. Remaining blanks are filled with the help of Profit and Loss Appropriation Account and Balances of Capital
Accounts of X and Y.