Prepare Profit and Loss Appropriation Account.
15. Xand Yare partners sharing profits in the ratio of 3:2 with capitals of 8,00,000 and 36,00,000 respectively.
Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of 60,000 which has not
been withdrawn. Profit for the year ended 31st March, 2020 before interest on capital but after charging
Y's salary was 2,40,000.
A provision of 5% of the net profit is to be made in respect of commission to the Manager.
Prepare Profit and Loss Appropriation Account showing the allocation of profits.
f3:2. The Partnership Deed provided
Answers
Step-by-step explanation:
ANSWER
(i) Profit and Loss Adjustment a/c
Dr. Cr.
Particulars Amount Particulars Amount
To Manager's
Commission
(30000*5%) 1500 By Profit and loss a/c
(after Y's salary) 24000
To Profit transferred to
Profit and loss appropriation a/c 28500 By Y's salary 6000
30000 30000
(ii) Profit and Loss Appropriation a/c
( for the year ended 31st March, 2018)
Dr. Cr.
Particulars Amount Particulars Amount
To Salary to Y 6000 By Profit and Loss Adjustment a/c 28500
To Interest on Capital:
- X's Capital a/c
- Y's Capital a/c
4000
3000
To Profit transferred to:
- X's Capital a/c
- Y's Capital a/c
9300
6200
28500 28500