1
Question
X and Y are partners sharing profits and lossesin the ratio of 3:2. X is a non-working partner and contributes Rs.20,00,000 as his capital. Y is a working partner of the firm. The Partnership Deed provides for interest on capital @ 8% P.a. and salary to every working partner @ Rs.8,000 per month. Net profit before providing for interest on capital and patner's salary for the year ended 31st March, 2018 was Rs.80,000. Show the distribution of profit.
Open in App
Solution
PROFIT AND LOSS APPROPRIATION ACCOUNT
Particulars Amount Particulars Amount To Interest on capital
X= 50,000
To Salary
Y= 30,000 80,000 By net profit 80,000 Total 80,000 Total 80,000
Interest on X's capital = 20,00,000*8%=1,60,000Salary to Y = 8000*12 = 96,000Total = 2,56,000Net profits available is less than the appropriations to be made. So,the appropriations are to be made in the ratio of interest and salary i.e 5:3.
| Particulars | Amount | Particulars | Amount |
| To Interest on capital X= 50,000 To Salary Y= 30,000 | 80,000 | By net profit | 80,000 |
| Total | 80,000 | Total | 80,000 |
Salary to Y = 8000*12 = 96,000
Total = 2,56,000
Net profits available is less than the appropriations to be made. So,the appropriations are to be made in the ratio of interest and salary i.e 5:3.
Suggest Corrections
0
Similar questions