Satish, Nitin and Ajay are partners with a fixed capital Rs 1,00,000, Rs 75,000 and Rs 75,000 respectively. Their current account balances were Satish Rs 5,000 (Cr.), Nitin Rs 4,000 (Cr.) and Ajay Rs 2,500 (Dr.). The partnership deed provided as under :
1. Interest on capital @ 5% p.a.
2. Nitin was entitled for rent @ Rs 500 p.m. for providing his premises to the firm.
3. Ajay was entitled to a salary of Rs 1,000 p.m.
The profits of the firm were to be distributed as follows :
A. The first Rs 20,000 in proportion to their capital.
B. Next Rs 20,000 in the ratio 2:2:1.
C. Remaining profits to be shared equally.
The net profit before the above adjustments for the year was Rs 85,500. Prepare Profit and Loss Appropriation Account, Capital Account and Current Account of the partners.
