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Question -

Ram, Raj and George are partners sharing profits in the ratio 5: 3: 2. According to the partnership agreement George is to get a minimum amount of ₹ 10,000 as his share of profits every year. The net profit for the year 2013 amounted to ₹ 40,000. Prepare the Profit and Loss Appropriation Account.



Answer -

Profit and Loss Appropriation Account

Dr.

 

 

 

 

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Profit transferred to

 

Profit and Loss

40,000

Ram’s Capital (20,000 – 1,250)

18,750

 

 

Raj’s Capital (12,000 – 750)

11,250

 

 

 

 

 

 

George’s Capital (8,000 + 1,250 + 750)

10,000

 

 

 

40,000

 

40,000

 

 

 

 

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