year 2015-16. ( 7. A and B are partners sharing profits and losses in the ratio of 2:1. With capitals of Rs. 10,00,000 and Rs. 5,00,000 respectively on 1st April 2019. Each partner is entitled to 8% p.a. interest on his capital. B is entitled to a salary of Rs.3,500p.m. together with a commission of 10% of Net profit remaining after deducting interest on capitals and salary and after charging his commission. The profits for the year ended 31st March, 2020 prior to calculation of interest on capital but after charging salary of B amounted to Rs. 4,50,000. Prepare Profit and Loss Appropriation Accounts. CE
Answers
Answer:
PROFIT AND LOSS APPROPRIATION ACCOUNT
Particulars Amount Particulars Amount
To Int on capital
A=50000*6%
= 3000
B=30,000*6%
= 1800 4800 By net profit 50000
To Commission
A=300000*2% 6000
To Salary
B=500*12 6000
To Commission
B(notes) 1581
To profits t/f to
A's Capital A/c= 23714
B's Capital A/c=7905 31619
Total 50000 Total 50000
PARTNERS CAPITAL ACCOUNT
Particulars A B Particulars A B
To drawings 8000 6000 By bal b/d 50000 30000
By Int on
capital 3000 1800
By commission 6000 1581
To bal c/d 74714 35286 By P/L app A/c 23714 7905
Total 82714 41286 Total 82714 41286
Notes:- Commission to B= 5% of profits after all expenses including such commission
= 50,000-4800-6000-6000
= 33,200*5/105 = 1581.
Explanation:
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Explanation:
Solution

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PROFIT AND LOSS APPROPRIATION ACCOUNT
Particulars Amount Particulars AmountTo Int on capital
A=50000*6%
= 3000
B=30,000*6%
= 1800 4800 By net profit 50000To Commission
A=300000*2% 6000 To Salary
B=500*12 6000 To Commission
B(notes) 1581 To profits t/f to
A's Capital A/c= 23714
B's Capital A/c=7905 31619 Total 50000 Total 50000 PARTNERS CAPITAL ACCOUNT Particulars A B ParticularsA B To drawings 8000 6000 By bal b/d 50000 30000 By Int on
capital3000 1800 By commission 6000 1581 To bal c/d 74714 41286 By P/L app A/c 23714 7905 By salary6000 Total 82714 47286 Total 82714 47286Notes:- Commission to B= 5% of profits after all expenses including such commission
= 50,000-4800-6000-6000
= 33,200*5/105 = 1581.