Question

A and B are partners. A’s Capital is ` 1,00,000 and B’s Capital is ` 60,000. Interest on capital is payable
@ 6% p.a. B is to get salary of ` 3,000 per month. Net Profit for the year is ` 80,000.
Prepare Profit and Loss Appropriation Account.

Answer 1

Answer:

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Explanation:

Profit and Loss Appropriation a/c

( for the year ended......)

Dr. Cr.

Particulars Amount Particulars Amount

To Interest on capital

- A

- B

6000

3600 By Profit a/c

(before interest and salary) 80000

To Salary to B (3000*12) 36000

To Profit transferred to:

- A's Capital a/c

- B's Capital a/c

17200

17200

800