Question

Hari and Mohan were in partnership sharing profits in proportion of 3: 2. On 1st Janu ary, 2004, their capitals were Rs. 30,000 and Rs. 20,000, respectively. Interest was agreed to be allowed on capital and charged on drawings at 10% per annum. Mohan is to be allowed an annual salary of Rs. 4,800 which had not been withdrawn. During the year 2004, Hari withdrew Rs. 200 per month and Mohan Rs. 400 per month on the first day of every month in anticipation of profits. The profits for the year, prior to calculation of interest on capital and drawings but after charging Mohan's salary, amounted to Rs. 22,500. A provision of manager's commission at 5% on net profit (after charging such commission) is to be made. Show the allocation of profits and prepare the partners' Current Accounts, if the capitals are fixed.

Answer 1

Explanation:

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