Prepare the profit and loss appropriation account for year

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Seema and Meena decided to start a partnership firm to manufacture low cost jute bags as plastic bags were creating many environmental problems. They contributed capitals of Rs 1,00,000 and Rs50,000 on 1st April 2018 for this. Seema expressed her willingness to admit Neema as a partner without capital, who is specially abled but very creative and intelligent friend of her. Meena agrees to this.

The terms of partnership were as follows:

(i) Seema, Meena and Neena will share profits in the ratio of 2:2:1.

(ii) Interest on Capital will be provided @6%p.a. Due to shortage of Capital in the firm, Seema contributed Rs25,000 on 30th September 2018 and Meena contributed Rs10,000 on 1st January 2019 as additional Capital.

Problem 1: The profit of the firm for the year ended 31st March 2019 before interest on capital was Rs1,68,900. Prepare the profit and loss Appropriation account for the year ended 31st march 2019

Reference no: EM132836938

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