A and B are partners sharing profits and losses in the ratio of 3 : 1. On 1st April, 2017, their capitals were: A ₹ 50,000 and B ₹ 30,000. During the year ended 31st March, 2018 they earned a net profit of ₹ 50,000. The terms of partnership are: (a) Interest on capital is to allowed @ 6% p.a. (b) A will get a commission @ 2% on turnover. (c) B will get a salary of ₹ 500 per month. (d) B will get commission of 5% on profits after deduction of all expenses including such commission. Partners drawings for the year were: A ₹ 8,000 and B ₹ 6,000. Turnover for the year was ₹ 3,00,000. After considering the above facts, you are required to prepare Profit and Loss Appropriation Account and Partners Capital Accounts.

A and B are partners sharing profits and losses in the ratio of 3 : 1.

1.	A and B are partners sharing profits and losses in the ratio of 3 : 1. On 1st April, 2017, their capitals were: A ₹ 50,000 and B ₹ 30,000. During the year ended 31st March, 2018 they earned a net profit of ₹ 50,000. The terms of partnership are: (a) Interest on capital is to allowed @ 6% p.a. (b) A will get a commission @ 2% on turnover. (c) B will get a salary of ₹ 500 per month. (d) B will get commission of 5% on profits after deduction of all expenses including such commission. Partners drawings for the year were: A ₹ 8,000 and B ₹ 6,000. Turnover for the year was ₹ 3,00,000. After considering the above facts, you are required to prepare Profit and Loss Appropriation Account and Partners Capital Accounts.
Answer» tion:Working Notes:1. Calculation of CAPITAL on InterestInterest on A's Capital = Interest on B's Capital = 2. Calculation of CommissionCommission to A = 2% on turnover= Commission to B = 5% on profit after all expense (including commission)profit for all commission= Rs 50,000 - Rs 4,800 - Rs 6,000= Rs 33,200Commission to B = 3. Calculation of Share of Profit of each Partner Profit AVAILABLE for Distribution

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