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 int on capital is agreed @5%p.a. yis to be allowed an annual salary of 60000 whichhas not been withdrawn.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
Answers
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
Explanation:
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