Question

1. A and B are partners sharing profit in the ratio of 3 : 2 with Opening Capitals of 50,000
and * 30,000 respectively. Interest on Capital is agreed @ 6% per annum. B is to be allowed
an annual salary of 2,500. During the year ended 31st March, 2007 the profits of
prior to calculation of interest on Capital but after charging B's Salary amounted to?
12,500. A provision of 5% of the profits after charging interest on capital salary is to be
made in respect of the A's commission. Prepare an account showing the allocation of
profits. Also prepare partners' Capital Accounts and current accounts. Current account
balances on 1st April, 2006 were A 2,000 (Cr.); B * 1,500 (Dr.).​

Answer 1

Explanation:

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