Question

27. A. B and C are partners sharing profits in 3 : 2:1. C's share of profits for the year ending 31st March 2020 amounts to 250,000. Interest allowed on partners capital is 1,50,000 and A is allowed a salary of 5,000 per month. Interest charged on partner's drawings is 2,000. What was the net profit of the firm before any appropriations? (A) 25,08,000 (B) 92,000 (C) 2.12,000 (D) 34.53,000 ​

Answer 1

Answer:

Solution

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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

Explanation:

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