A and B started a partnership business on 1st April, 2015. They contributed ?6,00,000 and ?4,00,000 respectively, as their capital. The terms of the partnership are as under: (I) Interest on capital and drawings @6% p.a. (II) B is to get a monthly salary of ?2,500. (III) Sharing of profit or loss will be in the ratio of their capital formation.
The profit for the year ended 31st March, 2016, before making above appropriations was ?2,07,400. The drawings of A and B were ?48,000 and ?40,000 respectively. Interest on drawings amounted to ?1,500 for A and ?1,100 for B. Prepare P&L appropriation a/c and partner's capital a/c assuming that their capitals are fluctuating.