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Lokesh and Azad are partners sharing profits in the ratio3:2, with capitals of Rs 50,000 and Rs 30,000, respectively.Interest on capital is agreed to be paid @ 6% p.a. Azad isallowed a salary of Rs 2,500 p.a.During 2013, the profits prior to the calculation of intereston capital but after charging Azad's salary amounted to Rs12,500. A provision of 5% of profits is to be made inrespect of manager's commission.Prepare accounts showing the allocation of profits andpartner's capital accounts. |
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Answer» Answer: Lokesh and Azad Are Partners Sharing PROFITS in the Ratio 3:2, with Capitals of Rs 50,000 and Rs 30,000, Respectively. - Accountancy Ledger Lokesh and Azad are partners sharing profits in the ratio 3:2, with capitals of Rs 50,000 and Rs 30,000, respectively. Interest on capital is agreed to be paid @ 6% p.a. Azad is allowed a SALARY of Rs 2,500 p.a. During 2016, the profits prior to the calculation of interest on capital but after charging Azad’s salary amounted to Rs 12,500. A provision of 5% of profits is to be made in respect of MANAGER’s commission. Prepare accounts showing the allocation of profits and partner’s capital accounts. Advertisement Remove all ads SolutionShow Solution Profit and Loss Adjustment Account Dr. Cr. Particulars Amount Rs Particulars Amount Rs Interest on Capital
By Profit and Loss (12,500 + 2,500) 15,000 Lokesh 3,000
4,800
Azad 1,800
Partner’s Salaries Azad 2500
Provision for Manager’s Commission `15,000 × (5/100)`
Profit transferred to
Lokesh Capital 4,170
6,950
Azad Capital 2,780
15,000
15,000 Partners’ Capital Account Dr. Cr. Particulars Lokesh Azad Particulars Lokesh Azad
Balance b/d 50,000 30,000
Interest on Capital 3,000 1,800 Balance c/d 57,170 37,080 Partner’s Salaries
2,500
Profit and Appropriation 4,170 2,780
57,170 37,080
57,170 37,080 |
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