Question

A,b and c have capitals of ₹ 60000, ₹30000 and ₹ 12000 respectively, on which they are entitled to get interest at 5% p.a. The profits for year before charging interest on capital amounted to ₹ 34000. Prepare profits & loss Appropriation A/C, if they share profits and losses in the ratio of 6 : 3 : 1.

Answer 1

Explanation:

to int on cap

a = 3000

b= 1500

c= 600

on credit by net profit 34000

then total of int on capital will be subtracted from net profit

34000- 5100 = 28400

then 28400 is to be share profit in the ratio 6:3:1

that is a= 28400 * 6/ 10

b= 28400*3/10

c= 28400*1/10