Amann, Babita and Suresh are Partners In a Firm. Their Profit Sharing Ratio is 2:2:1 - Bzziii.com

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 Amann, Babita and Suresh are partners in a firm. Their profit sharing ratio is 2:2:1. Suresh is guaranteed a minimum amount of Rs 10,000 as share of profit, every year. Any deficiency on that account shall be met by Babita. The profits for two years ending March 31, 2016 and March 31, 2017 were Rs 40,000 and Rs 60,000, respectively. Prepare the Profit and Loss Appropriation Account for the two years.




Profit and Loss Appropriation Account

for the year ended 31st March 2016

Dr                                                                                                                                              Cr.

ParticularsAmount RsParticularsAmount Rs
TO Profit transferred to By Profit and Loss40,000
Aman’s Capital          16,000  
Babita’s Capital (16,000 – 2,000)14,000  
Suresh’s Capital (8,000 + 2,000)10,000  
 40,000 40,000

Profit and Loss Appropriation Account

for the year ended 31st March 2017

Dr.                                                                                                                                           Cr.

ParticularsAmount RsParticularsAmount Rs
To Profit transferred to By Profit and Loss60,000
Amann’s Capital 24,000  
Babita’s Capital24,000  
Suresh’s Capital12,000  
 60,000 60,000


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