Question

38. A and B are partners sharing profits and losses in the ratio of 3:2. They invested capitals of
21.00.000 and 50,000 respectively. Compute interest on capital and show distribution of profits
in each of the following alternative cases:
(1) If the partnership deed is silent with regards to interest on capital and the profits for
are 8,000.
(m) If the partnership deed provides for interest on capital @ 5% p.a. and the profits for the year
are 7.500.
(1) if the partnership deed provided for interest on capital @ 5% p.a. and the profits for the year
are *9.000.
m # the partnership deed provided for interest on capital @ 5% p.a. losses for the year are
6.000.
(v) If the partnership deed provided for Interest on Capital @ 5% and the profits for the vear are
*3.000
(vi) If the partnership deed provides for Interest on Capital @ 5% p.a. even if it involves the firm
in loss and the profits for they year are 5,000.
An interest​

Answer 1

Explanation:

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