Case StudyRead the following information to answer.Arun and Ram are partners in a restaurant business sharing profits and losses in capital ratio. The - Accountancy MCQ CUET Accountancy 2022 20 Aug Shift 2 2026 | ExamTest.live

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Case StudyRead the following information to answer.Arun and Ram are partners in a restaurant business sharing profits and losses in capital ratio. Their fixed capital from the beginning of the firm was Rs. 2, 00, 000 and Rs. 1, 50, 000 respectively.The profit for the year ended 31 March 2022 before the appropriation of Salary and Interest on Capital was Rs. 2, 20, 000 . Ram is allowed a salary of Rs. 2, 000 per quarter and interest on capital @ 10% p.a.Due to the further expansion of the business, they decided to enter Sanjeev as a new partner for \frac{1}{5} share in profits. It was agreed that Sanjeev will bring Rs. 1, 00, 000 as capital and Rs. 50, 000 as his share of Goodwill. It was decided that he will give Rs. 1, 00, 000 as loan to the firm for 3 years.The amount of salary to be shown in the Dr. side of P & L Appropriation A/C will be:

Solution & Step-by-step Explanation

Ram's annual salary = Rs. 2, 000 per quarter \times 4 quarters = Rs. 8, 000 .This full amount will be debited to the Profit and Loss Appropriation Account.

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Case StudyRead the following information to answer.Arun and Ram are partners in a restaurant business sharing profits and losses in capital ratio. Their fixed capital from the beginning of the firm was Rs. 2, 00, 000 and Rs. 1, 50, 000 respectively.The profit for the year ended 31 March 2022 before the appropriation of Salary and Interest on Capital was Rs. 2, 20, 000 . Ram is allowed a salary of Rs. 2, 000 per quarter and interest on capital @ 10% p.a.Due to the further expansion of the business, they decided to enter Sanjeev as a new partner for \frac{1}{5} share in profits. It was agreed that Sanjeev will bring Rs. 1, 00, 000 as capital and Rs. 50, 000 as his share of Goodwill. It was decided that he will give Rs. 1, 00, 000 as loan to the firm for 3 years.The amount of salary to be shown in the Dr. side of P & L Appropriation A/C will be:

Rs. 2, 000

Rs. 8, 000

Rs. 12, 000

Rs. 24, 000

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