Question

A and B are partners sharing profits and losses In the ratio of 3 : 1. On 1st April, 2017; their capitals were: A Rs. 50,000 and B Rs. 30,000. During the year ended 31st March, 2018 they earned a net profit of Rs. 50,000. The terms of partnership are:
(a) Interest on capital is to be allowed @ 6% p.a.
(b) A will get a commission @ 2% on turnover.
(c) B will get a salary of Rs. 500 per month.
(d) B will get commission of 5% on profits after deduction of all expenses including such commission.
Partners' drawings for the year were: A Rs. 8,000 and B Rs. 6,000. Turnover for the year was Rs. 3,00,000.
After considering the above facts, you are required to prepare Profit and Loss Appropriation Account and Partners' Capital Accounts.

Answer 1

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars	Amount	Particulars	Amount
To Int on capital A=50000*6% = 3000 B=30,000*6% = 1800	4800	By net profit	50000
To Commission A=300000*2%	6000
To Salary B=500*12	6000
To Commission B(notes)	1581
To profits t/f to A's Capital A/c= 23714 B's Capital A/c=7905	31619
Total	50000	Total	50000

PARTNERS CAPITAL ACCOUNT

Particulars	A	B	Particulars	A	B
To drawings	8000	6000	By bal b/d	50000	30000
			By Int on capital	3000	1800
			By commission	6000	1581
To bal c/d	74714	35286	By P/L app A/c	23714	7905
Total	82714	41286	Total	82714	41286

Notes:- Commission to B= 5% of profits after all expenses including such commission

= 50,000-4800-6000-6000

= 33,200*5/105 = 1581.