question_answer

X and Y are partners sharing the profits and losses in the ratio of 3 : 2 with capitals of Rs. 24,000 and Rs. 12,000. On 1st July, 2017, X and Y granted loans of Rs. 48,000 and Rs. 18,000 respectively to the firm. Show the distribution of profits/losses for the year 2017, if the profits before any interest for the year amounted to Rs. 1,800.

Answer:

                                                            Profit and Loss Account Dr                                             for the year ending on 31st December, 2017                                               Cr

Particulars		Amt (Rs.)	Particulars		Amt (Rs.)
To Interest on Loan			By Profit before any Interest		1,800
X	1,440		By Net Loss (Transferred to capital account)
Y	540	1,980	X	108
			Y	72	180
		1,980			1,980

Working Notes (i) Interest on A's Loan =\[Rs.\text{ }48,000\times 6/100\times 6\text{ }/12\,\left( July\text{ }to\text{ }December \right)=Rs.1,440\] (ii) Interest on B's Loan =\[Rs.18,000\times 6/100\times 6/12\text{ }\left( July\text{ }to\text{ }December \right)\text{ }=Rs.\text{ }540\]