Question

Amal, Bimal and Kamal are three partners. On 1st April, 2017, their Capitals stood as: Amal Rs. 40,000, Bimal Rs. 30,000 and Kamal Rs. 25,000. It was decided that:
(a) they would receive interest on Capital @ 5% p.a.,
(b) Amal would get a salary of Rs. 250 per month,
(c) Bimal would receive commission @ 4% on net profit after deducting commission, interest on capital and salary, and
(d) After deducting all of these 10% of the profit should be transferred to the General Reserve.
Before the above items were taken into account, the profit for the year ended 31st March, 2018 was Rs. 33,360. Prepare Profit and Loss Appropriation Account and the Capital Accounts of the Partners.

Answer 1

PROFIT AND LOSS APPROPRIATION ACCOUNT

Particulars	Amount	Particulars	Amount
To interest on Capital Amal- 40000*5%=2000 Bimal=30000*5%=1500 Kamal=25000*5%=1250	4750	By net profit	33360
To salary to Amal 250*12	3000
To commission (Notes)	985
To general reserve (Notes)	2462
To profit T/f to Amal's capital A/c = 7388 Bimal's capital A/c = 7387 Kamal's capital A/c= 7388	22163
Total	33360	Total	33360

Notes:- Calculation of commission to Bimal=33360-4750-3000 = 25610

= 25610*4/104 = 985.

Transfer to general reserve = 33360-4750-3000-985 = 24625*10%=2462

PARTNERS CAPITAL ACCOUNT

Particulars	Amal	Bimal	Kamal	Particulars	Amal	Bimal	Kamal
				By bal b/d	40000	30000	25000
				By interest on capital	2000	1500	1250
				By salary	3000
				By commission		985
				By P/L Appropriation A/c	7388	7387	7388
To bal c/d	53388	39872	33638
Total	53388	39872	33638