Somali, Sohan and Shivain were partners in a pen manufacturing firm. They were sharing profits and losses in the ratio of 2: 2: 1. On 31st March,…

Dr. Sohan’s Capital Account Cr. Particulars Amount (₹) Particulars Amount (₹) To Sohan’s Executors A/c $\displaystyle 5,25,000$ By Balance b/d $\displaystyle 4,00,000$ By General Reserve A/c $\displaystyle 40,000$ By Interest on Capital A/c $\displaystyle 12,000$ By Sonali’s Capital A/c $\displaystyle 32,000$ By Shivain’s Capital A/c $\displaystyle 16,000$ By P&L Suspense A/c $\displaystyle 25,000$ $\displaystyle 5,25,000$ $\displaystyle 5,25,000$ Working Notes • Interest on Sohan’s Capital = $\displaystyle 4,00,000$ x $\displaystyle 12$/$\displaystyle 100$ x $\displaystyle 3$/$\displaystyle 12$ = ₹$\displaystyle 12,000$ • Sohan’s Share of Profit = $\displaystyle 5,00,000$ x ₹$\displaystyle 2,50,000$ x $\displaystyle 2$ = ₹$\displaystyle 25,000$ $\displaystyle 20,00,000$ $\displaystyle 5$