3. Accounts of Partnership Firms- Fundamentals www.tnschools.co.in www.textbooksonline.in TEXTBOOK SELF-EXAMINATION QUESTIONS SOLVED I. Choose the correct answer. 1. In the absence of a partnership deed, profits of the firm will be shared by the partners in (a) Equal ratio (b) Capital ratio (c) Both (a) and (b) (d) None of these Ans. (a) Equal ratio 2. In the absence of an agreement among the partners, interest on capital is (a) Not allowed (b) Allowed at bank rate (© Allowed @ 5% per annum (d) Allowed @ 6% per annum Aus. (a) Not allowed 3, As per the Indian Partnership Act, 1932, the rate of interest allowed on loans advanced by partners is (a) 8% per annum (6) 12% per annum (c) 8% per annum (@) 6% per annum Ans. (¢) 6% per annum: 4, Which of the following is shown in Profit and loss appropriation aecount? (a) Office expenses (b) Salary of staff (c) Partners’ salary (d) Interest on bank loan Ans. (c) Partners’ salary 5, When fixed capital method is adopted by a partnership firm, which of the following items will appear in capital account? (@) Additional capital introduced (6) Interest on capital (c) Interest on drawings (d) Share of profit Ans, (a) Additional capital introduced 6. When a partner withdraws regularly a fixed sum of money at the middle of every month, period for which interest is to be calculated on the drawings on an average is (a) 3.5 months (b) 6 months (©) 12 months (d) 6.5 months Ans, (5) 6 months 7. Which of the following is the incorrect pair? (a) Interest on drawings — Debited to capital account (6) Interest on capital — Credited to capital account, (c) Interest on loan — Debited to eapital account (d) Share of profit — Credited to capital account Ans, (c) Interest on loan — Debited to capital account 8. In the absence of an agreement, partners are entitled to (a) Salary () Commission (c) Interest on loan (d) Interest on capital Ans, (c) Interest on loanwww.tnschools.co.in www.textbooksonline.in 9, Pick the odd one out (a) Partners share profits and losses equally (b) Interest on partners’ capital is allowed at 7% per annum (c) No salary or remuneration is allowed (d) Interest on loan from parmers is allowed at 6% per annum Ans. (5) Interest on partners’ capital is allowed at 7% per annum 10, Profit after interest on drawings, interest on capital and remuneration is € 10,500. Geetha, a partner, is entitled to receive commission @ 5% on profits after charging such commission. Find out commission. (a) %50 (by 150 ()% 550 (a) 7 500 Ans, (d) % 500 TI Very short answer questions: 1, Define partnership. Ans. According to Section 4 of the Indian Partnership Act, 1932, partnership is defined as, “the relation between person who have agreed to share the profits of 2 business carried on by all or any of them acting for all. 2. What is a partnership deed? Ans. Partnership deed is a document in writing that contains the terms of the agreement among the partners, It is not compulsory for a partnership to have a partnership deed as per the Indian Partnership Act, 1932. But, it is desirable to have a partnership deed as it serves as an evidence of the terms of the agreement among the partners. 3. What is meant by fixed capital method? Ans, Under fixed capital method, the capital of the partners is not altered and it remains generally fixed. Two accounts are maintained for each partner namely: (q) Copital account and (b) Current account The transactions relating to initial capital introduced, additional capital introduced and capital permanently withdrawn are entered in the capital account and all other transactions are recorded in the current account, 4. What is the journal entry to be passed for providing interest on capital to a partner? Ans, (a) For providing interest on capital | Date Particulars LE | Debit (%) | Credit @) Interest on Capital A/c Dr. XXX To Pariner’s Capital current Ae | [x (6) For closing interest on capital account Date Particulars LE. | Debit @ | Credit Profit and Loss appropriation Ale. Dr Xxx To Interest on Capital A/c xxxwww.tnschools.co.in www.textbooksonline.in 5. Why is Profit and loss appropriation account prepared? Ans. The profit and loss appropriation account is an extension of profit and loss account prepared for the purpose of adjusting the transactions relating to amounts due to and amounts due from partners, It is nominal account in nature. The balance being the profit or loss is transferred to the partners’ capital or current account in the profit sharing ratio. III Short answer questions: 1. State the features of partnership. 1, Partnership is an association of two or more persons. The maximum number of partners is limited to 50. 2. There should be an agreement among the persons to share the profit or loss of the business. The agreement may be oral or written or implied. 3. The agreement must be to carry on a business and to share the profits of the business. 4, The business may be carried on by all the partners or any of them acting for all. 2. State any six contents of a partnership deed. The contents of partnership deed are: 1. The name of the firm and nature and place of business. 2. Date of commencement and duration of business. 3, Names and address of all partners, 4, Capital contributed by each partner. 5. Profit sharing ratio. 6. Amount of drawings allowed to each partner. 3. State the differences between fixed capital method and fluctuating capital method. S.No. | Basis of distinction | Fixed capital method Hluctoatiug capital method 1. | Number of accounts | Two accounts are maintained | Only one account, that for each partner, that is, |i, capital account is capital account and current | maintained for each. account, partner. 2. [Change in capital | The amount of capital The amount of capital normally remains unchanged | changes from period to expect when additional period. capital is introduced or capital is withdrawn permanently. 3. [Closing balance | Capital account always shows| Capital account generally accredit balance. But, current | shows credit balance. It account may show either | may also show a debit debit or credit balance balance.www.tnschools.co.in www.textbooksonline.in 4. JAdjustments JAll adjustments relating to | All adjustments relating to interest on capital, interest _| interest on capital, interest ‘on drawings, salary or ‘on drawings, salary or commission. share of profit | commission, share of profit | ‘or loss are done in current ot loss are done.in the [account. capital account. 4. Write a brief note on the applications of the provisions of the Indian Partnership Act, 1932 in the absence of partnership deed. i, Remuneration to partners: No salary or remuneration is allowed to any partner. [Section 13(2)] ii, Profit sharing ratio Profit and losses are to be shared by the partners equally. [Section 13(b)] iii, Interest on capital: No interest is allowed on the capital. When a partner is entitled to interest on capital contributed as per partnership deed, such interest on capital will be payable only out of profits [Section 13(¢)] iv, Interest on loans advanced by partners to the firm: Interest on loan is to be allowed at the rate of 6 percent per annum, [Section 13(4)] v. Interest on drawings: No interest is charged on the drawings of the partners. 5, Jayaraman is a partner who withdrew 10,000 regularly in the middle of every month. Interest is charged on the drawings at 6% per annum, Caleulate interest on drawings for the year ended 31 December, 2018. : Jayaraman: » ¢ Interest on drawings: 10,000 x 33-* 79g * 12= © 3600 IV Exercises: 1, Akash, Bala, Chandru and Daniel are partners in a firm. There is no partnership deed. How will you deal with the following? (i) Akash has contributed maximum capital. He demands interest on capital at 10% per annum. (i) Bala has withdrawn Z 3,000 per month, Other partners ask Bala to pay interest on drawings @ 8% per annum to the firm, But, Bala did not agree to i (iii) Akash demands the profit to be shared in the capital ratio, But, others do not agree. (iv) Daniel demands salary at the rate of € 10,000 per month as he spends full time for the business. (¥) Loan advanced by Chandru to the firm is € 50,000, He demands interest on loan @ 12% per annum, () No interest on capital is payable to any partner (ii) No interest is charged on drawing made by the partner 4(iii) Profit should be distributed equally (iv) No remuneration is payable to any partner (v) Interest on loan is payable at 6% per annum, 2. From the following information, prepare capital accounts of partners Rooban and Deri, when their capitals are fixed. Particulars jeceee [ayes Capital on Ist April, 2018 70,000] 50,000 Current account on Ist April, 2018 (Cr) 25,000) 15,000 Additional capital introduced 18,000] 16,000 Drawings during 2018 - 2019 10,000} 6,000 Interest on drawings 500] 300 Share of profit for 2018 ~ 2019 35,000 25,800 Interest on capital 3,500] 2,500 Salary Nit| 18,000 Commission 12,000} Nit Dr CAPITAL ACCOUNT cr Particulars | Rooban | _ Deri Particulars | Rooban | Deri To balance e/d 88,000| 66,000 | By balance b/d 70,000] 50,000 |. By bank A/e 13,000] 16,000 | By Balance b/d 88,000| 66,000, Dr CURRENT ACCOUNT Cr Particulars | Rooban | Deri Particulars | Rooban | Deri ‘To Drawing 10,000] 6,000 | By balance bid 25,000) 13,000 ‘To Interest on 500 300 By share of profit | 35,000] 25,800 Drawing To Balance oid 65,000| $5,000 | By Interest on 3,500| 2,500 capital | By Salary -| 18,000 By Commission 12,000 75,500 61,300 75,500 ByBalanee bid | 65,000www.tnschools.co.in www.textbooksonline.in 3. Arun and Selvam are partners who maintain their capital accounts under fixed capital method, From the following particulars, prepare capital accounts of partners, Particulars Arun (@) | Selvam (2) Capital on Ist January, 2018 2,20,000/ 1,850,000 Current account on Ist January, 2018 4,250(Dr:) | 10,000(Cr.) Additional capital introduced during the year Nil 70,000 Withdrew for personal use 10,000 20,000 Interest on drawings 750 600 Share of profit for 2018 | 22,000 15,000 Interest on capital 1,100 750 Commission 6,900 Nil Salary 6,850 Dr CAPITAL ACCOU Cr. Arun_|_Selvam Arun _| Selvam To balance e/d 2,20,000| 2,20,000 | By balance ed | 2.20,000] 1,50,000 By bank -| 70,000, 2.20,000| 2.20.00 | 2,20,000 | 2.20,000 Dr CURRENT ACCOUNT Cr. Arun | Selvam | Arun | Selvam To balance b/d 4,250 —|By balance b/d =| 10,000 To Drawings 10,000] 20,000 | By share of profit 22,000] 15,000 To Intezest on 750 600 | By Interest on 100]. 750 Drawings capital To balance cht | 15,000) 12,000 | By Commission 6,900 7 | By Salary —_ 30,000/ 32,600 ~ 30,000 By Balance b/d 15,000/ 12,000) 4. From the following information, prepare capital accounts of partners Padmini and Padma, when their capitals are fluctuating. Particulars | a Pas Capital on Ist January 2018 (Cr. balance) 5,00,000| 4,00,000 Drawings during 2018 70,000) 40,000 Interest on drawings 2,000) 1,000 | Share of profit for 2018 52,000, 40,000www.tnschools.co.in www.textbooksonline.in Interest on capital 30,000| 24,000 Salary 45,000 Nil Commission Nil] — 21,000 Dr CAPITAL ACCOUNT cr Padmini | Padma Padmini | Padma ‘To Drawings 70,000] 40,000] By bal. b/d 5,00,000] 4,00,000 To Interest on Drawings | 2,000 ‘1,000 By share of profit | 52,000] 40,000 By Interest on. 30,000] 24,000 capital To balance c/d 5,55,000| 4,44,000 | By salary 45,000 - By commission -|_ 21,000 6,27,000 | 4,85,000 6.27,000 | 4,85,000 l By balance b/d__| 5,55,000| 4,44,000 5. Mannan and Ramesh share profits and losses in the ratio of 3:2 and their capital on 1* April, 2018 was Mannan 1,50,000 and Ramesh & 1,00,000 respectively and their current accounts show a credit balance of 25,000 and % 20,000 respectively. Calculate interest on capital at 6% p.a. for the year ending 31" March, 2019 and show the journal entries. Interest on Capital: Mannan’s Capital = 9,000 Ramesh’s Capital = 6,000 ‘Mannan: Ramesh: 6 1,50,000 « +55 = 9000 1,00,000 x 795 = 6000 Journal Entries: Interest on Capital A/c 15,000 To Mannan’s Capital A/c To Ramesh’s Capital Alo (Interest on Capital entered) 9,000 6,000 6. Prakash and Supria were partners who share profits and losses in the ratio of 5:3. Balance in their capital account on Ist April, 2018 was Prakash € 3,00,000 and Supria %2,00,000. On 1st July, 2018 Prakash introduced additional capital of 60,000. Supria introduced additional capital of € 30,000 during the year. Calculate interest on capital at 6% p.a, for the year ending 31° March, 2019 and show the journal entries. Prakash: Supria: 3,00,000 Se = 18,000 2,00,000 « 5 = 12,000 ‘Additional capital: (on 1" July) Supria’s Total Interest: 6 6 6 60,000 * 795 30,000 x Tog * 47 = 200 ‘Total Prakash’s Interest Supria’s total Interest: 12,900www.tnschools.co.in www.textbooksonline.in Journal Entries Particulars LE Debit | Credit Interest on capital A/e Dr 33,600 To Prakash's Capital | 20,700 To Supria’s Capital 12,900 (Interest on capital entered) . The capital account of Begum and Fatima on ist January, 2018 showed a balance of 50,000 and & 40,000 respectively. On Ist October, 2018, Begum introduced an additional capital of & 10,000 and on Ist May, 2018 Fatima introduced an additional capital of 9,000. Calculate interest on capital at 4% p.a. for the year ending 31st December, 2018. Begum: Fatima: | 50,000 « 54 40,000 > 75 = 1,600 Additional capital: 10,000 x 4 9,000 x4. x8 = 249 1000 T05 1000 * Tog * 12 Begum’s Total Interest: Fatima’s Total Interest: 1,840 . From the following balance sheets of Subha and Sudha who share profits and losses in 2:3, caleulate interest on capital at 5% p.a. for the year ending 31st December; 2018. Balance sheet as on 31st December, 2018 Liabilities z= z Assets: z Capital accounts: Fixed assets 70,000 Subha 40,000 Current assets 50,000 Sudha 60,000 | 1,00,000 Current liabilities 20,000 1,20,000 1,20,000 Profit eamed during the year was & 30,000. Drawings of Subha and Sudha during the year were % 8,000 and & 10,000, respectively. Capital Subha_| Sudha (4) Drawings 40,000) 60,000 8,000) 10,000 48,000| 70,000 (© Profit 12,000} 18,000 36,000| 52,000www.tnschools.co.in www.textbooksonline.in Subha: Sudha: 8 36,000 x 759° Interest on Capital: Sudha’s Capital : 2,600 Subha’s Capital : 1,800 = 1,800 5 52,000 * 799 = 2,600 |. From the following halance sheets of Rajan and Devan who share profits and losses 2:1, calculate interest on capital at 6% p.a. for the year ending 31st December, 2018. Balance sheet as on 31st December 2018 Liabilities z z Assets z Capital accounts: Sundry assets | 2,20,000 Rajan 1,00,000 Devan 80,000] 1,80,000 Profit and loss appropriation A/c 40,000 2,20,000 2,20,000 On Ist April, 2018, Rajan introduced an additional capital of € 40,000 and on Ist September, 2018, Devan introduced % 30,000. Drawings of Rajan and Devan during the year were 20,000 and & 10,000 respectively. Profit eamed during the year was 70,000. Rajan’s Total Interest: Rajan Devan Capital 1,00,000 80,000 (+) Drawings . 20,000 10,000 1,20,000 90,000 (© Additional capital 40,000 30,000 80,000 60,000 © Profit 20,000 10,000 60,000 50,000 Interest on Capital Rajan: 2 Devan: a 60,000 = +95 = 3,600 50,000 x 75g = 3,000 Additional capital: 40,000 « aor x = 30,000 x = s= 600 Devan’s Total Interest:www.tnschools.co.in www.textbooksonline.in 10. Ahamad and Basheer contribute € 60,000 and % 40,000 respectively as capital. Their respective share of profit is 2:1 and the profit before interest on capital for the year is 5,000. Compute the amount of interest on capital in each of the following situations: (@ if the partnership deed is silent as to the interest on capital (i) if interest on capital @ 4% is allowed as per the partnership deed (iii if the partnership deed allows interest on capital @ 6% per annum. (i) No Interest on capital is allowed. Gi) Since the profit is sufficient, Interest on capital will be provided Ahamad: Basher: 4 60,000 » sy = & 2,400 40,000 x Fg = % 1,600 (iii) Since the profit is insufficient, Interest on capital will be provided. Ahamad: é Basheer: 60,000 x 74g = % 3,600 40,000 * & = % 2,400 Profit of 5.000 will be distributed to the partners in their capital ratio of 3:2. 11, Maniis a partner, who withdrew % 30,000 on Ist September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed. Mani: 30,000 « 00 * + = % 600 Interest on drawings of Mani = 600. 12, Santhosh is a partner in a partnership firm. As per tie partnership deed, interest on drawings is charged at 6% per annum. During the year ended 31st December, 2018 he withdrew as follows: ———— Date February 1 2,000 May 1 10,000 July 1 4,000 [October 1 6.000 Calculate the amount of interest on drawings. Interest on Drawings = Amount x Rate of Interest x Period 6 Feb 1 = 20 og a> F HO 8 May 1 => 10,000 x > ae ia = 400 6 6 S July 1 => 4,000 x 795 Xa = & 120 10www.tnschools.co.in www.textbooksonline.in 13. 14, 15. 6 Oct 1 = 6,000 x 795 * Total Interest Kumar is a partner in a partnership firm, As per the partnership deed, interest on drawings is charged at 6% per annum. During the year ended 31st December, 2018 he withdrew as follow: Date March 1 June 1 September 1 December 1 Calculate the amount of interest on drawings Interest on Drawings = Amount x Rate of Interest x Period March 1 = 4,000 ey x ae % 200 June | = 4000% 765 x= & 140 sept = 4,000 785 x= & 80 Decl => 4,000 755 x= € 20 Total Interest 440 Mathew isa partner who withdrew 20,000 during the year 2018, Interest on drawings is charged at 10% per annum. Calculate interest on drawings on 31st December 2018. Mathew: 6 10 20,000 x 799 * Tz = & 1,000 Interest on drawings of Mathew = 1,000, Santhosh is a partner in a partnership firm. As per the partnership deed, interest on drawings is charged at 6% per annum. During the year ended 31st December, 2018 he withdrew as follows: Date z | February 1 2,000 May 1 10,000 July 1 4,000 October | 6,000 Calculate the amount of interest on drawings by using product method. I16. 17. 18. nschools.co.in www.textbooksonline.in Date of Drawings Amount Period Product | Feb 1 2000 rb 22,000 May | 10,000, 8 80,000 July 1 4,000 6 24,000, Oct 1 6,000 3 18,000 1,44,000 Interest on drawings = al x Rate of interest x + = 1,44,000 x = F720 ion" 7 Kavitha is a partner in a firm. She withdraws € 2,500 p.m, regularly. Interest on drawings is charged @ 4% p.a. Calculate the interest on drawings using average period, if she draws (@® at the beginning of every month (ii) in the middle of every month (iii) at the end of every month (i At the beginning of era month: 4 2,500 « 12 « 755 * = % 650 (ii) In the middle of every month: 412 2,500 x 12 « 795 x gz = F 600 (iti) At the end of every month: é zits au. Ses 2,800 x 12 x 799 x Be = F 550 Kevin and Francis are partners. Kevin draws 5,000 at the end of each quarter. Interest, on drawings is chargeable at 6% p.a. Caleulate interest on drawings for the year ending 31st March 2019 using average period. Calculation of interest on drawings of Kevin. Total amount of drawings: 5000 x 4 = 20,000 Interest on drawings = Amount x Rate of Interest x Average period _ 6 8S aye = 20,000 x 70g * Fz = % 450 Ram and Shyam were partners. Ram withdrew & 18,000 at the beginning of each half year: Interest on drawings is chargeable @ 10% p.a. Calculate interest on the drawings for the year ending 31st December 2018 using average p Tota] amount of drawing: 18,000 x 2 = 36,000 Interest on drawings = Amount x Rate of Interest x Average period penal 10 9 = 36,000 100 “12> 72700 12www.tnschools.co.in www.textbooksonline.in 19. Janani, Kamali and Lakshmi are partners in a firm sharing profits and losses equally. As per the terms of the partnership deed, Kamali is allowed a monthly salary of 10,000 and Lakshmi is allowed a commission of € 40,000 per annum for their contribution to the business of the firm. You are required to pass the necessary journal entry. Assume that their capitals are fluctuating, Kamali’s Salary A/c Dr. 1,20,000 To Kamali’s capital A/c 1,20,000 [Kamali’s Salary transferred to her capital A/c] Lakshmi’s commission A/c Dr. 40,000 To Lakshmi’s capital A/c 40,000 [Commission transferred to her capital A/c] Profit and Loss appropriation A/c Dr. 160,000 To Kamali’s salary A/e 1,20,000 ‘To Lakshmi’s Commission A/e 40,000 {Salary and Commission account transferred] 20. Sibi and Manoj are partners in a firm. Sibi is to get a commission of 20% of net profit before charging any commission. Manoj is to get a commission of 20% on net profit after charging all commission. Net profit for the year ended 31st December 2018 before charging any commission was € 60,000. Find the commission of Sibi and Manoj. Also show the distribution of profit. Caleulation of Commission: Commission to Sibi: Net profit before comiss x %oof commission ‘on (700 + % of commission) 20 = 60,000 « Fog = % 12,000 ‘Commission to Manoj: Net profit after Sibi’s comission x % of commission (100 + % of commission) 20 = 48,000 x 755 = % 8,000 21. Anand and Narayanan are partners in a firm sharing profits and losses in the ratio of 5:3, On Ist January 2018, their capitals were % 50,000 and Z 30,000, respectively. The partnership deed specifies the following: (a) Interest on capital is to be allowed at 6% per annum, (b) Interest on drawings charged to Anand and Narayanan are & 1,000 and & 800, respectively. (©) The net profit of the firm before considering interest on capital and interest on drawings amounted to 35,000. Give necessary journal entries and prepare profit and loss appropriation account as on 31st December 2018, Assume that the capitals are fluctuating, 13www.tnschools.co.in www.textbooksonline.in Dr Profit and Loss Appropriation Account cr Particulars ‘Amount Particulars ‘Amount To Interest on Capital By profit and loss A/e 35,000 ‘Anand: 3000 By Interest on drawings: ‘Narayanan: 1800) 48,000} “Anand: 1000 Nerayanan: 800 1,800 To share of profit 32,000 Anand’s Capital A/e — 20,000 Narayanan’s Capital A/e ~ 12,000 36,800 36,800 Journal Entries Journal LF | Debit | Credit Interest on Capital A/c Dr 48,000 To Anand’s capital A’e 3,000 To Narayanan’ capital A/e 1,800 [1.0.C @ 6% p.a provided]. Profit and loss appropriation A/c Dr. 48,000 To Interest on capital A/c 48,000 [1.0.C A/c closed}. | Anand’s Capital Ae Dr 1,000 Narayanan’s Capital A/e Dr. 800 To Interest on drawings A/e 1,800 1.0. charged] Tnterest on drawing A/e Dr.| 1,800 To Profit and loss Appropriation A/e 1,800 {1.0.D transferred] Profit and loss appropriation A/c Dr 32,000 To Anand’s Capital Ale 20,000 ‘To Narayanan’s Capital A/c 12,000 (Profit transferred] 22. Dinesh and Sugumar entered into a partnership agreement on Ist January 2018, Dinesh contributing? 1,50,000 and Sugumar 1,20,000 as capital. The agreement provided that: (a) Profits and losses to be shared in the ratio 2:1 as between Dinesh and Sugumar. (b) Partners to be entitled to interest on capital @ 4% p.a. (©) _ Interest on drawings to be charged Dinesh: & 3,600 and Sugumar: & 2,200 (d) Dinesh to receive a salary of ® 60,000 for the year, and (@) Sugumar to receive a commission of € 80,000 During the year ended on 31st December 2018, the firm made a profit of € 2,20,000 before adjustment of interest, salary and commission Prepare the Profit and loss appropriation account. 14www.tnschools.co.in Dr Profit and Los: www.textbooksonline.in ss Appropriation Account cr Particulars | Amount Particulars Amount To Interest on Capital: By Interest on drawings: Dinesh: 6,000 Dinesh: 3,600 Sugumar: 4,800 10,800 | Sugumar: 2,200 5,800 To Dinesh’s Salary 60,000 | By profit and loss A’e | —2,20,000 To Sugumar’s Commission 80,000 To share of profit 75,000 Dinesh’s capital $0,000 | Sugumar's capital 25,000 | 225,800 2,25,800 23. Antony and Ranjith started a business on Ist April 2018 with capitals of & 4,00,000 and & 3,00,000 respectively. According to the Partnership Deed, Antony is to get salary of % 90,000 per annum, Ranjith is to get 25% commission on profit after allowing salary to Antony and interest on capital @ 5% p.a. but before charging such commission, Profit-sharing ratio between the two partners is 1:1. During the year, the firm earned a profit of € 3,65,000. Prepare profit and loss appropriation account. The firm closes its aecounts on 31st March every year. Dr Profit and Loss Appropriation Account cr Particulars Amount Particulars Amount ‘To Antony’s Salary 90,000 | By profit or loss 3,65,000 To Interest on capital: Antony: 20,000 Ranjith: 15,000 35,000 To Ranjith’s Commission 48,000 To share of profit 1,92,000 Antony's Cap: 96,000 Ranjith Cap: 96,000 3,65,000 3,65,000 15