[ISC] Q. 65 Solution of Fundamentals of Partnership TS Grewal ISC 2023-24 Edition

The partnership agreement of Raman, Daman and Sharman provides that:

1. (i) Profits will be shared by them in the ratio of 2 : 2 : 1.
2. (ii) Interest on capital to be allowed at the rate of 6% per annum.
3. (iii) Interest on drawings to be charged at the rate of 3% per annum.
4. (iv) Daman to be given a salary of ₹ 1,000 per month.
5. (v) Daman’s guarantee to the firm that the firm would earn a net profit of at least ₹ 1,60,000 per annum and any shortfall in these profits would be personally met by him.

The capitals of the partners on 1st April, 2021, were:

Raman—₹ 2,40,000; Daman—₹ 2,00,000 and Sharman—₹ 2,00,000.

All the three partners withdrew ₹ 2,000 each at the beginning of every month.

The net profit for the year 2021–22 was ₹ 1,40,000.

You are required to prepare for the year 2021–2022:

1. (i) Profit and Loss Appropriation Account.
2. (ii) Daman’s Capital Account.