on 1 apr 2013 bal of a and b are cap acc current ac a 1,00,000 cr 8420 b 40,000 dr 3200 on 1 july 2013 a withdrew 20,000 from his cap and b introduce 10000 as further cap on same date int on cap should be 8%pa but int to be allowed or charged on current account balances and drawing . ais entitled to 3/5and b 2/5 of profit the manager of firm entitled comm of 10% of profit before any adjustment is made according to deed for the year ended 31 mar 2014 profit was rs 40,000 and drawing of a and b were 12,000 and 10,000 prepare p and l app account cap account and current account ans manager comm 4,000 profit 25400 current account balance a 18460(cr) b 760 (cr) cap account balance a 80,000 b 50,000
Dear Student,
The solution to your query is provided below:
Manager's Commission = 10% of net profit without any adjustment = 10% of 40,000 = 4,000
Remaining profit for appropriation = Rs 36,000
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Profit and Loss Appropriation Account |
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Dr. |
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Cr. |
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Particulars |
Amount Rs |
Particulars |
Amount Rs |
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Interest on Capital A/c: |
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Profit and Loss A/c |
36,000 |
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A |
6,800 |
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B |
3,800 |
10,600 |
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Profit transferred to: |
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A’s Current A/c |
15,240 |
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B’s Current A/c |
10,160 |
25,400 |
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36,000 |
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36,000 |
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Partners’ Capital Account |
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Dr. |
Cr. |
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Particulars |
A |
B |
Particulars |
A |
B |
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Cash A/c |
20,000 |
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Balance b/d |
1,00,000 |
40,000 |
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Balance c/d |
80,000 |
50,000 |
Cash A/c |
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10,000 |
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1,00,000 |
50,000 |
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1,00,000 |
50,000 |
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Partners’ Current Account |
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Dr. |
Cr. |
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Particulars |
A |
B |
Particulars |
A |
B |
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Balance b/d |
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3,200 |
Balance b/d |
8,420 |
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Drawings |
12,000 |
10,000 |
Interest on Capital A/c |
6,800 |
3,800 |
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Balance c/d |
18,460 |
760 |
P/L Appropriation A/c |
15,240 |
10,160 |
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30,460 |
13,960 |
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30,460 |
13,960 |
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