P and Q are the partners sharing profit and losses in the ratio 3:2. On 1st July 2020, P granted loan of ₹1,00,000 and On 1st October 2020, Q granted a loan of ₹2,00,000 to the firm. On 31 march 2021, the net profit of the firm was ₹50,000 before any interest on loan to partners. Profit transferred to P & L Appropriation A/C will be:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹39,500.
"Interest on loan"
P = 1,00,000 * 6/100 * 9/12
= 4,500
Q = 2,00,000 * 6/100 * 6/12
= 6,000
Total interest = 4,500 + 6,000
= 10,500
Net profit before any interest = 50,000
Profit transferred to P & L App A/c = Net profit before interest - Interest on partners loan
Net Profit transferred to P & L App. A/c = 50,000 - 10,500
= 39,500