Sajal and Kajal are partners sharing profits and losses in the ratio of 2 1 On 1st April 2018 their ...........

Sajal and Kajal are partners sharing profits and losses in the ratio of 2 : 1. On 1st April, 2018 their Capitals were: Sajal – 50,000 and Kajal – 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 30,000.

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

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

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

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