Question

a and b are partners.a's capital is 100000 and b's capital is 60000.intrest on capital is payable @6%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.

Answer 1

                                 Profit and loss appropriation A/C
Particulars                           Amt(Rs)           Particulars                        Amt(Rs)
To Intrest on capital:                                    To Profit                               80000
A's Capital A/c:   6000
B's Capital A/c:   3600        9600
To Salary(B's capital A/c)   36000
To Profit transferred to:
A's Capital A/c:  17200  
B's Capital A/c   17200        34400

                                            80000                                                      80000