Question

A and B are partners with a profit sharing ratio of 2:1 and capitals of ₹ 3,00,000 and ₹ 2,00,000respectively. They are allowed 6% p.a. interest on their capitals and are charged 10% p.a. interest on their drawings. Their drawings during the year were A ₹ 60,000 and B ₹ 40,000. B’s share of net profit as per profit and loss appropriation account amounted to ₹ 40,000. Net profit of the firm before any appropriations was: *

Answer 1

Answer:

Add: Interst on capital= A - 18000

B- 12000

profit....=120000

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150000

Less: interst on drawing=A- 3000

B- 2000

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145000 ans...

Answer 2

The correct answer is option (d) 1,40,000.

                         Profit and loss appropriation a/c

Particulars                  Rs.                       Particulars                  Rs.

To IOC:                                             By p & l a/c                   1,40,000

A= 6% of 3,00,000                           By IOD:

B= 6% of 2,00,000   30,000            A= 10% of 60,000

To partner's share                             B= 10% of 40,000       10,000

of profit:

A= 2/3 × 1,20,000

B= 1/3 × 1,20,000        1,20,000                                                                  

                                   1,50,000                                               1,50,000