X and Y are partners sharing profits in the ratio of 3 : 2 with capitals of ₹ 80,000 and ₹ 60,000 respectively. Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of ₹ 6,000 which has not been withdrawn. Profit for the year ended 31st march, 2018 before interest on capital but after charging Y’s salary amounted to ₹ 24,000. A provision of 5% of the profit is to be made in respect commission to the manager. Prepare an account showing the allocation profits.

X and Y are partners sharing profits in the ratio of 3 : 2 with capita

1.	X and Y are partners sharing profits in the ratio of 3 : 2 with capitals of ₹ 80,000 and ₹ 60,000 respectively. Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of ₹ 6,000 which has not been withdrawn. Profit for the year ended 31st march, 2018 before interest on capital but after charging Y’s salary amounted to ₹ 24,000. A provision of 5% of the profit is to be made in respect commission to the manager. Prepare an account showing the allocation profits.
Answer» ion profits are calculated as below. Explanation:Y’s Salary= Rs.6000 Interest AGREED is 5% Manger’s COMMISSION will be calculated as: So, commission of Manager will be Interest on capital for X and Y will be: Thus, the Interest on capital for X and Y will be Rs. 4000 and Rs. 3000 respectively.Profit SHARING for each partner would be:- 30,000 – 1500 (Manager’s commission) = Rs, 28,500 Profit to be calculated on X’s shareY’s share Thus, the X and the Y's share will be Rs. 9300 and Rs. 6200 respectively.

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