Black and white are partners with capital of rs 30000 and rs 20000. profits for the year ended 31st march 2011 amounted to rs. 27100. it is agreed that 5 % interest on capital as such shall be allowed . there is no agreement regarding sharing of profits or partnership salary. black is a whole time partner whereas white does not attend business regularly . black claims rs. 600 salary per month and 60% of balance profits. white advanced rs.10000 as loan and he now claims 10% interest.
State how will you settle the accounts.
( interest on capital @ 5% = black - 1500, white= 1000
interst on loan @ 6 % = white - 600
Residue of profit equally = black - 12000, white - 12000 )
Profit and Loss Appropriation Account for the year ended March 31, 2011 | ||||
Dr. | Cr. | |||
Particulars | Amount Rs | Particulars | Amount Rs | |
Interest on Capital A/c: Black White |
1,500 1,000 |
2,500 | Profit and Loss A/c (Net Profit) | 27,100 |
Interest on White’s Loan
|
| 600 |
|
|
Profit transferred to: Black’s Capital White’s Capital |
12,000 12,000 |
24,000 |
|
|
| 27,100 |
| 27,100 | |
|
|
| ||
* As the partnership deed is silent regarding the distribution of profits, so profits should be distributed equally between the partners.
* Also, as the partnership deed is silent regarding the salary, so no salary should be given to any partner.