Question

X, Y and Z are partners in a firm having capital Rs. 1,00,000, Rs. 80,000 and Rs. 60,000 respectively. the current balances were : X - Rs. 6,000, Y - Rs. 5,000 and Z- Rs. 2,000(Dr.). According to the partnership deed, the partners were entitled to interest on capital @ 6% p.a. Z was entitled to a salary of Rs 5,000 p.a. and Y was entitled to a commission of Rs. 4,000 p.a. The profits were to be divided as follows:
(1) the first Rs. 24,000 in the proportion of their capital
(2) remaining profit to be divided equally.
(3) they drew Rs. 1,000 p.m. each as drawings.
During the year, firm made a profit of rs. 53,400 before charging any of the above items. Prepare the Profit and Loss Appropriation Account and current account of partners.

Answer 1

Explanation:

interest on drawing is not charged if it is not in deed