Sumi and Mini are partners sharing profits in the ratio of 3: 2. Their capital stood at Rs. 50,000 and Rs. 30,000 respectively. As per the deed interest on capital is payable at 6% p.a. Mini is entitled to an annual salary of Rs. 2,500. The firm has reported a profit of Rs. 12,500 before charging interest on capital but after charging Mini’s salary for the year ending on 31-03-2009).
Towards Manager’s Commission a provision of 5% is to be made.
Prepare P & L Appropriation Account and partner’s Capital A/c.