A and B contribute Rs. 50,000 and Rs. 30,000 respectively by way of capital on which they agree to allow
interest at 6 % p.a. Their respective share of profit is 3 : 2 and the profit for the year is Rs. 4,000 before allowing
interest on capitals. Prepare the necessary account to allocate interest on capitals.
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A and B are partners sharing profits in the ratio of 3 : 2. with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of Rs. 2,500. During the year profit prior to interest on capital but after charging B's salary amounted to Rs. 12,500. A provision of 5% of the profits is to be made in respect of Manager's Commission. Prepare an account showing the allocation of profits and the Partners' Capital Accounts.
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