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

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

36,000

A

6,800

 

 

 

B

3,800

10,600

 

 

Profit transferred to:

 

 

 

A’s Current A/c

15,240

 

 

 

B’s Current A/c

10,160

25,400

 

 

 

36,000

 

36,000

 

 

 

 

 

Partners’ Capital Account

Dr.

Cr.

Particulars

A

B

Particulars

A

B

Cash A/c

20,000

 

Balance b/d

1,00,000

40,000

Balance c/d

80,000

50,000

Cash A/c

 

10,000

 

1,00,000

50,000

 

1,00,000

50,000

 

 

 

 

 

 

Partners’ Current Account

Dr.

Cr.

Particulars

A

B

Particulars

A

B

Balance b/d

 

3,200

Balance b/d

8,420

 

Drawings

12,000

10,000

Interest on Capital A/c

6,800

3,800

Balance c/d

18,460

760

P/L Appropriation A/c

15,240

10,160

 

30,460

13,960

 

30,460

13,960

 

 

 

 

 

 

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