A and B are partners sharing profits in the ratio of 3:2, with Capital

1.	A and B are partners sharing profits in the ratio of 3:2, with Capitals of Rs 5,00,000 and 3,00,000 respectively. Interest on Capital is agreed at 6% p.a. B is to be allowed an annual salary of Rs 60,000. During the year 2016-17, the profits prior to the calculation of interest on capital but after charging B's salary amounted to Rs 1,80,000. A provision of 5% of the profit is to be made in respect of commission to the Manager. Prepare Profit and Loss Appropriation account showing the distribution of profit and the partner's capital accounts for the year ending March 31, 2017.
Answer» A and B are partners sharing profits in the ratio of 3:2, with Capitals of Rs 5,00,000 and 3,00,000 respectively. Interest on Capital is agreed at 6% p.a. B is to be allowed an annual salary of Rs 60,000. During the year 2016-17, the profits prior to the calculation of interest on capital but after charging B's salary amounted to Rs 1,80,000. A provision of 5% of the profit is to be made in respect of commission to the Manager. Prepare Profit and Loss Appropriation account showing the distribution of profit and the partner's capital accounts for the year ending March 31, 2017.

A and B are partners sharing profits in the ratio of 3:2, with Capitals of Rs 5,00,000 and 3,00,000 respectively. Interest on Capital is agreed at 6% p.a. B is to be allowed an annual salary of Rs 60,000. During the year 2016-17, the profits prior to the calculation of interest on capital but after charging B's salary amounted to Rs 1,80,000. A provision of 5% of the profit is to be made in respect of commission to the Manager. Prepare Profit and Loss Appropriation account showing the distribution of profit and the partner's capital accounts for the year ending March 31, 2017.

Answer»

A and B are partners sharing profits in the ratio of 3:2, with Capitals of Rs 5,00,000 and 3,00,000 respectively. Interest on Capital is agreed at 6% p.a. B is to be allowed an annual salary of Rs 60,000. During the year 2016-17, the profits prior to the calculation of interest on capital but after charging B's salary amounted to Rs 1,80,000. A provision of 5% of the profit is to be made in respect of commission to the Manager.

Prepare Profit and Loss Appropriation account showing the distribution of profit and the partner's capital accounts for the year ending March 31, 2017.

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