A and B are partners sharing profits and losses in the ratio of 2:1 A is a nonworking partner and has contributed rs 2400000 as his capital B is a working partner the partnership deed provides for interest on capital @ 10 % p.a. and salary of rs 15000 pm to the working partner the net profit of the year was 140000 before providing interest and salary you are required to show the distribution of the profits
Profit and Loss Appropriation Account for the year ended… | ||||
Dr. |
|
| Cr. | |
Particulars | Amount (Rs) | Particulars | Amount (Rs) | |
Interest on Capital to A | 2,40,000 | Profit and Loss A/c (Net Profit) | 1,40,000 | |
Salary to B (15,000 × 12) | 1,80,000 | Loss transferred to: |
| |
|
| A’s Capital A/c | 1,86,667 |
|
|
| B’s Capital A/c | 93,333 | 2,80,000 |
| 4,20,000 |
| 4,20,000 | |
|
|
|
|