Sajal and Kajal are partners sharing profits and losses in the ratio of 2 : 1. On 1st April, 2018 their Capitals were: Sajal – rs 50,000 and Kajal – rs 40,000.

Prepare Profit and Loss Appropriation Account and the Partners' Capital Accounts at the end of the year after considering the following items:

(a) Interest on Capital is to be allowed @ 5% p.a.

(b) Interest on the loan advanced by Kajal for the whole year, the amount of loan being rs 30,000.

(c) Interest on partners' drawings @ 6% p.a. Drawings: Sajal rs 10,000 and Kajal rs 8,000.

(d) 10% of the divisible profit is to be transferred to Reserve.

Net profit for the year ended 31st March, 2019 is rs 68,460.

Note: Net profit means net profit after debit of interest on loan by the partner.      (5 marks)