Question

Rayan and Riya commenced business with capital investments of respectively on 1st April 2020. They agreed to share profits and losses in the ratio of 3:2
For the year ending 31.03.2021 they earned a profit of 36,000 before allowing the following:
Interest on Capital at 5% p.a.
Salary to Riya 650 per month for first 6 months and 600 per month for remaining months.
Partners drawings: Rayan 20,000, Riya 10,000 and interest for the same is 10%.
Commission to Rayan 1,000.
From the above, prepare Profit and Loss Appropriation A/c for the year ending 31.03.2021​

Answer 1

Answer:

Distribution of profit

1. Rayan: 10800
2. Riya :7200