Manish Naveen and Vaibhav are partners in a firm balances of their capital account Rs 400000, Rs 300000 and Rs 200000 respectively. Partnership agreement provides :
(A) Vaibhav shall be credited 40000 salary per annum
(B) After providing Vaibhav salary 10%p.a interest on capital to all partners and extra remuneration to vaibhav as provided in this paragraph (B) vaibhav shall be entitled to 10% of all profits in excess of 35000p.a
(C) Navan is to have 1/3rd of the profits after charging all amount under (A),(B),(C)
(D) The balance is to be divided between MANISH and Vaibhav in ratio 4:1 .
. The profits for the year ended 31st March 2017 ( before making any provision for the above ) was Rs 330000 . You have to prepare profit and loss appropriation account and partners capital account for the year ending 31st March 2017.During the year Manish, Navan, Vaibhav withdrew the amount for personal use 20000, 15000,10000 respectively
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Answer:
Manish, Navan and Vaibhav are partners in a firm, balance of their capital account as on 1st April, 2016 were Rs 4,00,000, Rs 3,00,000 and Rs 2,00,000 respectively. The partnership agreement provides – A. Vaibhav shall be credited for Rs 40,000 of salary per annum. B. After providing Vaibhav salary, 10% p.a. interest on capital to all partners and extra remuneration to Vaibhav as provided in this paragraph ‘B’, Vaibhav shall be entitled to 10% of all profits in excess of Rs 35,000 p.a. C. Navan is to have one-third of the profits after charging all amount under ‘A’, ‘B’, ‘C’. D. The balance is to be divided between Manish and Vaibhav in the ratio 4 : 1. The profits for the year ended 31st March, 2017 (before making any provision for the above) was Rs 3,30,000. You have to prepare Profit and Loss Appropriation Account and Partners’ Capital Account for the year ending 31st March, 2017. During the year Manish, Navan and Vaibhav withdrawn the amount for personal use Rs 20,000, Rs 15,000 and Rs 10,000 respectively.
