Question

Prem and Manoj are partners in a firm sharing profits in the ratio of $3:2$. The Partnership Deed provided that Prem was to be paid salary of $Rs.2,500$ per month and Manoj was to get a commission of $Rs.10,000$ per year. Interest on capital was to be allowed @ 5% p.a. and interest on drawings was to be charged @ 6% p.a. Interest on Prem's drawings was $Rs.1,250$ and on Manoj's drawings was $Rs.425$. Interest on Capitals of the partners were $Rs.10,000$ and $Rs.7,500$ respectively. The firm earned a profit of $Rs.90,575$ for the year ended 31st March, 2018.
Prepare Profit and Loss Appropriation Account of the firm.

Answer 1

Profit and Loss Appropriation a/c

(for the year ended 31st March,2018)
Dr. Cr.

Particulars	Amount	Particulars	Amount
To Salary to Prem (2500 * 12)	30000	By Profit and Loss a/c	90575
To Interest on Capital: - Prem - Manoj	10000 7500	By Interest on Drawings: - Prem - Manoj	1250 425
To Commission to Manoj	10000
To Profit transferred to: - Prem's Capital a/c - Manoj's Capital a/c	20850 13900
	92250		92250