Question

x and y are partners sharing profits in the ratio of 3:2 with capital of 800000 and 600000. int on capital is agreed @5%p.a. yis to be allowed an annual salary of 60000 whichhas not been withdrawn. profit for yr ended 31 march,2020 before IOC but after charging y's salary was 240000. A provision of 5% of the net profit is to be made in respect of commission to manager​

Answer 1

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

Answer 2

Explanation:

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