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Problem - Mr. A and Mr. B start a business on 01st June ,2021, with capital of 2,570,000 and 800,000. According to agreement Mr. A is entitled for a salary of 250,000 whereas another partner is entitled for Rs. 46,000. Partners borrowed some amount of loan from a financial institution of Rs. 300,000 at 12% interest rate. The interest on capital 7.5% p.a is allowed to partner B. During their first fiscal year of partnership, they earned a net profit of Rs. 1,650,000.
Profit and Loss appropriation account to allocate the profit with 3:2 to partners A and B respectively. Provide necessary journal entries. Moreover, also prepare a capital account for the partnership.
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