Question

8 A and B were partners in a firm with a capital contribution of 1,00,000 and 2,00,000 respectively. A is entitled to a salary of 15,000 per month with a commission of 10% on net profit before charging any commission but after charging salary. B is entitled to a salary of 50,000 per month together with a commission of 10% on net profit after charging all commissions. Net profit for the year before complying with any of the provision of partnership deed is 12,00,000. Show the distribution of profit among the partners ​

Answer 1

Answer:

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Answer 2

Answer:

PROFIT AND LOSS APPROPRIATION A/C

(for the year ended 31st March, 2018)

Dr. Cr.

Particulars Amount Particulars Amount

To Partner's Salary a/c

- X (10000*12)

- Y

120000

25000 By Net Profit a/c 420000

To Partner's Commission a/c

- X

- Y

27500

22500

To Profit transferred to:

- X's Capital a/c

- Y's Capital a/c

112500

112500

420000 420000

Working Note:

Calculation of partner's commission:

Commission to X= Profit after partner's salary but before charging such commission

Profit after salary= 420000-145000

= 275000

X's commission= 275000* 10/100

= 27500

Commission to Y= Profit after partner's salary and commission

Profit after salary and commission= 420000-145000-27500

= 247500

Y's commission= 247500 * 10/110

= 22500