A and B are partner sharing profit and losses in the ratio of 3:2. Their capital balances on 1st April'2019 A Rs. 20,000 and B Rs. 40,000. On 1st July'2018 A introduce additional capital worth Rs. 30,000. Total drawings of the firm was amounted to Rs. 40,000 drawn on 1st April'2018 on 1st April 2018 in their profit ratio. Deed entitled for intetest on capital @ 10% p.a. Profit of the firm on 31st march' 2019 was amounted to Rs 40,000 before allowing interest on capital. You are reqired to calculate interest on capital of A. *
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ACCOUNTANCY
A and B are partners sharing profits and losses In the ratio of 3 : 1. On 1st April, 2017; their capitals were: A Rs. 50,000 and B Rs. 30,000. During the year ended 31st March, 2018 they earned a net profit of Rs. 50,000. The terms of partnership are:
(a) Interest on capital is to be allowed @ 6% p.a.
(b) A will get a commission @ 2% on turnover.
(c) B will get a salary of Rs. 500 per month.
(d) B will get commission of 5% on profits after deduction of all expenses including such commission.
Partners' drawings for the year were: A Rs. 8,000 and B Rs. 6,000. Turnover for the year was Rs. 3,00,000.
After considering the above facts, you are required to prepare Profit and Loss Appropriation Account and Partners' Capital Accounts.
December 26, 2019
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Monalisa Gaikwad
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ANSWER
PROFIT AND LOSS APPROPRIATION ACCOUNT
Particulars Amount Particulars Amount
To Int on capital
A=50000*6%
= 3000
B=30,000*6%
= 1800 4800 By net profit 50000
To Commission
A=300000*2% 6000
To Salary
B=500*12 6000
To Commission
B(notes) 1581
To profits t/f to
A's Capital A/c= 23714
B's Capital A/c=7905 31619
Total 50000 Total 50000
PARTNERS CAPITAL ACCOUNT
Particulars A B Particulars A B
To drawings 8000 6000 By bal b/d 50000 30000
By Int on
capital 3000 1800
By commission 6000 1581
To bal c/d 74714 35286 By P/L app A/c 23714 7905
Total 82714 41286 Total 82714 41286
Notes:- Commission to B= 5% of profits after all expenses including such commission
= 50,000-4800-6000-6000
= 33,200*5/105 = 1581.