X and Y are partners with capitals of Rs 1,00,000 and Rs 80,000 respectively on 1st April, 2016 and their profit sharing ratio is 2: 1. Interest on capital is agreed @ 12%p.a. Y is to be allowed an annual salary of Rs 6,000. The profit for the year ended 31st March, 2017 amounted to Rs 50,000.Manager is entitled to a commission of 10% of the profits.
Prepare profit and loss appropriation account and capital accounts.
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X and Y are partners with capital of Rs 1,00,000 and Rs. 80,000 respectively on 1st April 2016 and their profit sharing ratio is 2:1. Interest on capital is agreed @12% p.a. Y is to be allowed an annual salary of Rs. 6,000. The profit for the year ended 31st March, 2017 amounted to Rs.50,000.Manager is entitled to a commission of 10% of the profits. Prepare Profit and Loss Appropriation Account.
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Profit & Loss appropriation A/C
Particulars Amount Particulars Amount
To Interest on capital
X
Y
To Y
′
s salary
To Manager's commission
To Profit transferred to partners capital a/c
12,000
9,600
6,000
5,000
17,400 By Net profit 50,000
50,000 50,000