P and Q are partners with capitals ofRs.6,00,000 andRs.4,00,000 respectively. The

profit and Loss Account of the firm showed a net Profit ofRs.4,26,800 for the year.

Prepare Profit and Loss Appropriation account after taking the following into

consideration: -

i Interest on P's Loan of Rs. 2,00,000 to the firm

ii Interest on capital to be allowed@ 6% p.a.

iii. Interest on Drawings@ 8% p.a. Drawings were; PRs 80,000 and Q Rs. 50,000.

iv. Qis to be allowed a commission on sales@ 3%. Sales for the year was Rs. 10,00,000

v. 10% of the divisible profits is to be kept in a Reserve Account.​