Question

ACCOUNTANCY A and B are partners sharing profits and losses In the ratio of 3 : 1. On 1st April, 2017; their capitals were: A Rs. 50,000 and B Rs. 30,000. During the year ended 31st March, 2018 they earned a net profit of Rs. 50,000. The terms of partnership are: (a) Interest on capital is to be allowed @ 6% p.a. (b) A will get a commission @ 2% on turnover. (c) B will get a salary of Rs. 500 per month. (d) B will

Answer 1

Answer:

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars  Amount  Particulars  Amount

To Int on capital

A=50000*6%

 = 3000

B=30,000*6%

 = 1800  4800  By net profit  50000

To Commission

A=300000*2%  6000    

To Salary

B=500*12  6000    

To Commission

B(notes)  1581    

To profits t/f to

A's Capital A/c= 23714

B's Capital A/c=7905  31619    

Total  50000  Total  50000

                               

PARTNERS CAPITAL ACCOUNT

Particulars  A  B  Particulars A   B

To drawings  8000  6000  By bal b/d  50000  30000

      By Int on

capital 3000   1800

      By commission  6000  1581

To bal c/d  74714  35286  By P/L app A/c  23714  7905

Total  82714  41286  Total  82714  41286

           

Notes:- Commission to B= 5% of profits after all expenses including such commission

= 50,000-4800-6000-6000

= 33,200*5/105 = 1581.