Interest on Drawings: =Total Drawings X Rate/100 X Months for interest/12 *When date of withdrawal is not given in the question –6 months interest is charged. * When unequal /irregular amount is withdrawn on different dates then interest on drawings is charged by using product method in following ways:- Interest on Drawings = Total of product X Rate/100 X1/12 Some Formats:- Profit and Loss Appropriation Account For the year ended…………….. Dr. Cr. Particulars Rs. Particulars Rs. To Interest on Capital By net profit (after interest on To partners salaries partners loan To Partners commission By interest on Drawings To Reserve (Transfer from Net By net divisible loss transferred profit if required ) to partners capital a/c (bal. fig) To Managers commission ( To net divisible profit transferred to partners capital a/c(bal. fig) Partners capital account :- When capital accounts are fixed Dr Partners capital account Cr Particulars A B Particulars A B To cash/Bank (withdrawal By bal b/d (opening bal) of capital) By Cash/bank(additional To bal c/d capital introduced) Dr Partners’ Current Account Cr. Particulars A B Particulars A B To bal b/d (in By bal b/d (in case of credit case of debit opening bal ) opening bal) By salaries To Drawings By interest on capital To interest on By profit & loss appropriation Drawings a/c To profit & Loss By commission appropriation a/c To bal c/d (b)when Capital account is fluctuating Dr. Partners capital account cr Particulars A B Particulars A B To bal b/d By bal b/d (in case of credit
Interest on Drawings: =Total Drawings X Rate/100 X Months for interest/12 *When date of withdrawal is not given in the question –6 months interest is charged. * When unequal /irregular amount is withdrawn on different dates then interest on drawings is charged by using product method in following ways:- Interest on Drawings = Total of product X Rate/100 X1/12 Some Formats:- Profit and Loss Appropriation Account For the year ended…………….. Dr. Cr. Particulars Rs. Particulars Rs. To Interest on Capital To partners salaries To Partners commission To Reserve (Transfer from Net profit if required ) To Managers commission ( To net divisible profit transferred to partners capital a/c(bal. fig) By net profit (after interest on partners loan By interest on Drawings By net divisible loss transferred to partners capital a/c (bal. fig) Partners capital account :- When capital accounts are fixed Dr Partners capital account Cr Particulars A B Particulars A B To cash/Bank (withdrawal of capital) To bal c/d By bal b/d (opening bal) By Cash/bank(additional capital introduced) Dr Partners’ Current Account Cr. Particulars A B Particulars A B To bal b/d (in case of debit opening bal) To Drawings To interest on Drawings To profit & Loss appropriation a/c To bal c/d By bal b/d (in case of credit opening bal ) By salaries By interest on capital By profit & loss appropriation a/c By commission (b)when Capital account is fluctuating Dr. Partners capital account cr Particulars A B Particulars A B To bal b/d By bal b/d (in case of credit
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