A and B are partners. A's capital is 100000 and B's capital is 60000. Interest on capital is payable @ 6 percent p.a. B is entitled to a salary of 3000 per month. Profit for the current year before interest and salary to B is 80000. Prepare profit and loss appropriation account
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To solve this equation first need to understand that Debit is what come in and credit is what goes out. So
Dr. side Interest of A - 6000
Dr. side Interest of B - 3600
Dr. side Salary of B - 36000
Dr. Net profit - 34400
Cr. side current year profit - 80000
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