12. A and B are partners in a fimm sharing profits and losses in the ratio of
3:2. On 1st January, 2017, their capitals were 50,000 and 40,000 respectively.
Interest on capital is to be allowed @ 5% p.a. 'A' is to be allowed a salary of * 6,000
p.a. and B is to be allowed a commission @ 5% on net profit before charging such
commission prior to division of profit between the partners. The Profit and Loss alc
for the year ended 31st Dec. 2017 showed a net profit of 780,000 before charging
the interest on capital, salary and commission.
Prepare the Profit and Loss Appropriation a/c from the above particulars.
(Ans. Net Profit A 39,615, B 26,410)
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12th
Accountancy
Accounting for Partnership Firms - Fundamentals
Special Aspects of Partnership Accounts
A and B are partners sharin...
ACCOUNTANCY
A and B are partners sharing profits in the ratio of 3 : 2. with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of Rs. 2,500. During the year profit prior to interest on capital but after charging B's salary amounted to Rs. 12,500. A provision of 5% of the profits is to be made in respect of Manager's Commission. Prepare an account showing the allocation of profits and the Partners' Capital Accounts.
December 26, 2019
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Fardin Kapil
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ANSWER
Profit And Loss Account
Particulars Amount Particulars Amount
To Manager;s
commission
(15000*5/100) 750 By profit before B's Salary
(12500+2500) 15000
To Net profit T/f to
P/L Appropriation
Account 14250
Total 15000 Total 15000
Profit And Loss Appropriation Account
Particulars Amount Particulars Amount
To Interest on capital
A = 50000*6% = 3000
B=30000*6% = 1800 4800 By net profit 14250
B's Salary 2500
To profit T/f to
A's Capital A/c = 4170
B's Capital A/c = 2780 6950
Total 14250 Total 14250
Partners capital account
Particulars A B Particulars A B
By bal b/d 50000 30000
By Int on capital 3000 1800
salary 2500
To bal c/d 57170 37080 By P/L Appr A/c 4170 2780
Total 57170 37080 Total 57170 37080