A and B are partners in a firm sharing profit in their capital ratio.A contributed '150000 while B contributed '100000. A gave loan amounting '50000 to the firm.The profit of the firm before allowing interest of loan amounted to '60500 for the year ending 31sr march 2016. show the distribution of profit after consideration the following:
1. allow interest on capital @5%p.a. and charge interest on drawing @6% p.a. Drawing during the year were '30000 and 20000 respectively.
2. A is allowed commission @2% on sales '250000.
3. B is entitled to a commission on profir @5%after charging commission of A and his own.
4. 10% of divisible profit be transferred to general reserve
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