Question

(Commission to Partners and Distribution of Profit). $X$ and $Y$ are partners in a firm. $X$ is to get a commission of $10\%$ of net profit before charging any commission. $Y$ is to get a commission of $10\%$ on net profit after charging all commissions. Net profit for the year ended 31st March, 2018, before charging any commission was $Rs.55,000$.
Find the commission of $X$ and $Y$. Also, show the distribution of profit.

Answer 1

Profit and loss Appropriation Account

Particulars	Amount	Particulars	Amount
To X's commission A/c (55,000*10%)	5500	By net profit	55,000
To Y's commission (55,000-5500)*10/110	4500
To profit transferred to- X- 22,500 Y-22,500
Total	55,000	Total	55,000