Dinesh and Sugumar entered into a partnership agreement on 1st January 2018, Dinesh contributing Rs.1,50,000 and Sugumar Rs.1,20,000 as capital. The agreement provided that:
(a) Profits and losses to be shared in the ratio 2:1 as between Dinesh and Sugumar.
(b) Partners to be entitled to interest on capital @ 4% p.a.
(c) Interest on drawings to be charged Dinesh: Rs.3,600 and Sugumar: Rs.2,200
(d) Dinesh to receive a salary of Rs.60,000 for the year, and
(e) Sugumar to receive a commission of Rs.80,000.
During the year ended on 31st December 2018, the firm made a profit of Rs.2,20,000 before adjustment of interest, salary and commission.
Prepare the Profit and loss appropriation account.
