Question

A and B are partners sharing profits and losses in the ratio of 2:1 with capitals of Rs 3,00,000 and Rs 2,00,000 respectively. The partnership deed provides for interest on capital @6% p.a. and the trading profits for the year are Rs 24,000. (

Answer 1

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.

Explanation: