X and y introduced capital 30000 respectively on 1 july 2017 and intre...
Profit and Loss Appropriation Account
- Profit for the year: $10,000
- Interest on Capital: 10% p.a.
- Monthly drawings: $500 each
- Year-end drawings: $4,500 each
Calculation of Interest on Capital:
X's capital on 1st July 2017 = $30,000
Y's capital on 1st July 2017 = $30,000
Total capital for the year = $60,000
Interest on capital = 10% of $60,000 = $6,000
Calculation of Monthly Drawings:
Monthly drawings for X and Y = $6,000 / 12 = $500 each
Year-End Drawings:
Year-end drawings for X and Y = $4,500 each
Profit Distribution:
Total profit = $10,000
X's share = $5,000
Y's share = $5,000
Profit and Loss Appropriation Account
| Particulars | Amount ($) |
|------------------|------------|
| Profit for the year | 10,000 |
| Interest on Capital | 6,000 |
| X's share of profit | 5,000 |
| Y's share of profit | 5,000 |
| X's drawings | 4,500 |
| Y's drawings | 4,500 |
| Balance C/D | 7,000 |
| Total | 10,000 |
The remaining profit of $7,000 will be carried forward to the next financial year.
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