Question

Amar, Bhanu, and Charu are partners in a firm. Amar and Bhanu are to get annual salary of ₹ 1,20,000 p.a. each as they are fully involved in the business. Net profit for the year is ₹ 4,80,000. Determine the share of profit to be credited to each partner.

Answer 1

Profit and Loss Appropriation Account for the year ended …
Dr.					Cr.
Particulars		Amount (₹)	Particulars		Amount (₹)
Salary:			Profit and Loss A/c		4,80,000
Amar	1,20,000
Bhanu	1,20,000	2,40,000
Profit transferred to:
Amar’s Capital A/c	80,000
Bhanu’s Capital A/c	80,000
Charu’s Capital A/c	80,000	2,40,000
		4,80,000			4,80,000