Question

(C) Profit and Loss Appropriation Account
Calculation of Commission and Distribution of Profits
bi
X, Y and Z are partners in a firm with respective capitals of 50.000, 30,000 and
20,000. According to the aprtnership deed each partner is entitled to interest on
capital @ 5% p.a. and a salary of 1,000 p.a. of the net divisible profit X is entitled
to 40% : Y to 30% and 2 to 30% of the first 5.000. Over this amount, the the profit
is to be shared equally. The Profit and Loss a/c for the year ended 2017, disclosed
a net profit of 25,000.
Prepare Profit and Loss Appropriation Account and Partners capital Accounts for
2017.
(Ans. Profit- X 76,000, Y 75,500 and Z 5,500, Bal. of Cap. Account X 59,500,
Y? 38,000, Z 27,500)​

Answer 1

Answer:

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Explanation:

Interest on capital is to be calculated on the capitals at the beginning for the relevant period. ...

Tutorial note: If capital at the beginning is not given, then it can be calculated as below:

Mannan and Ramesh share profits and losses in the ratio of 3:1. ...

Interest on capital = Amount of capital x Rate of interest.