A B and C are partners in a firm on 1st april 2018 their capitals stood at rs. 4,00,000 rs. 3,00,000 es .2,00,,000 respectively
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Explanation:
Their Current Account balances were. A: Rs. 10,000; B: Rs. 5,000 and C: Rs. 2,000 (Dr.). According to the Partnership Deed the partners were entitled to an interest on Capital @ 10% p.a. C being the working partner was also entitled to a salary of Rs.12,000 p.a. The profits were to be divided as:
(a) The first Rs. 20,000 in proportion to their capitals.
(b) Next Rs. 30,000 in the ratio of 5 :3 : 2.
(c) Remaining profits to be shared equally.
The firm earned net profit of Rs.1,72,000 before charging any of the above items.
Prepare Profit and Loss Appropriation
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