A and B are partners with a profit sharing ratio of 2:1 and capitals of rs 300000 and Rs 200000 respectively. They are allowed 6% p.a. interest on their capitals and are charged10% p.a. interest on their drawings . their drawings during the year were Rs 60000 and 40000. B’s share of net profit as per profit and loss appropriation account amounted to Rs 40000. Net profit of the firm before any appropriation was:
a. 122000
b. 113000
c. 117000
d. 140000
Answers
Answer:
140000 Ans
Explanation:
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Explanation:
And Loss Account
Particulars Amount Particulars Amount
To Manager;s
commission
(15000*5/100) 750 By profit before B's Salary
(12500+2500) 15000
To Net profit T/f to
P/L Appropriation
Account 14250
Total 15000 Total 15000
Profit And Loss Appropriation Account
Particulars Amount Particulars Amount
To Interest on capital
A = 50000*6% = 3000
B=30000*6% = 1800 4800 By net profit 14250
B's Salary 2500
To profit T/f to
A's Capital A/c = 4170
B's Capital A/c = 2780 6950
Total 14250 Total 14250
Partners capital account
Particulars A B Particulars A B
By bal b/d 50000 30000
By Int on capital 3000 1800
salary 2500
To bal c/d 57170 37080 By P/L Appr A/c 4170 2780
Total 57170 37080 Total 57170 37080