Question

A and B started business on 1st April,2017 with capital Rs.3,00,000 and Rs.2,00,000 respectively. According to the deed, B is to get a salary of Rs.5,000 per month. A is to get 10% commission on profit after allowing salary to B and interest on Capital is to be allowed @6%p.a. During the year, firm earned a profit of Rs.2,50,000. Partners share Profit and Loss in 3:2. Books are closed on 31st March,2018. Pass journal entries and prepare Profit and Loss Appropriation A/C.
please answer it's important ​

Answer 1

Answer:

interest on cap ac Dr. 30000

to a cap ac. 18000

to b cap ac. 12000

profit and loss appropriation ac Dr.30k

to interest on cap ac. 30k

B salary ac Dr. 5000

B ac. 5000

p and l appropriation ac Dr. 5000

to salary to b ac. 5000