Profit and Loss Adjustment Account |
|||
Dr. |
|
|
Cr. |
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
Manager’s Commission (3,00,000×5%) |
15,000 |
Profit and Loss A/c |
2,40,000 |
|
|
Y’s Salary |
60,000 |
Profit transferred to Profit and Loss |
|
|
|
Appropriation A/c |
2,85,000 |
|
|
|
3,00,000 |
|
3,00,000 |
|
|
|
|
Profit and Loss Appropriation Account |
||||
Dr. |
|
|
Cr. |
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Salary to Y |
60,000 |
Profit and Loss Adjustment A/c |
2,85,000 |
|
Interest on Capital: |
|
(After manager’s commission) |
|
|
X |
40,000 |
|
|
|
Y |
30,000 |
70,000 |
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
93,000 |
|
|
|
Y’s Capital A/c |
62,000 |
1,55,000 |
|
|
|
2,85,000 |
|
2,85,000 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Manager’s Commission
Profit for making Managers’ Commission = 2,40,000 + 60,000 (Y’s Salary) = ₹3,00,000
WN 2 Calculation of Interest on Capital
WN 3 Calculation of Profit Share of each Partner
Profit available for distribution = 2,85,000 − 60,000 − 70,000 = ₹1,55,000