Question

X and Y are partners sharing profit and loss at the ratio of 1/3 and 2/3 respectively. The net income for this accounting period is Rs 10,000 while salary of X = Rs 2,000, interest on Y's drawings = Rs 3,000 and interest on X's capital = Rs 2,000. What is the X's share of profit or loss after the adjustment for partner's salary, interest on capital and interest on drawings?

• A. 3,000
• B. 6,000
• C. 9,000
• D. 2,000

Answer 1

The correct option is A 3,000

X and Y share profit & loss in a 1:2 ratio. Salary of X is Rs2,000 along with interest on his capital of Rs2,000. Y has to pay interest on drawings of Rs3,000 and firm earned Rs10,000 ass profits.

Profit & Loss Appropriation a/c

Particulars (Dr.)	Amount	Particulars (Cr.)	Amount
To Interest on capital a/c (X) To salary a/c (X) To profit on appropriation X's capital a/c 3,000 Y's capital a/c 6,000	2,000 2,000 9,000	By p/l a/c By interest on drawings a/c (Y)	10,000 3,000

Thus, X's share of profit after all appropriations is $Rs3,000$