Profit and Loss Adjustment Account
for the year ended 31st March 2019
|
Dr. |
Cr. |
|
Particulars |
Amount
(₹) |
Particulars |
Amount
(₹) |
|
Manager’s Commission (3,00,000 × 5%) |
15,000 |
Profit and Loss A/c
(Net Profit after Y’s salary) |
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
for the year ended 31st March 2019
|
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:
1. Calculation of Manager’s Commission
Profit for making Managers’ Commission = 2,40,000 + 60,000 (Y’s Salary) = ₹3,00,000
Manager’s Commission = ₹(3,00,000 x \(\frac 5{100}\)) = ₹15,000
2. Calculation of Interest on Capital
Interest on X's Capital A/c = ₹(8,00,000 x \(\frac 5{100}\)) = ₹40,000
Interest on Y's Capital A/c = ₹(6,00,000 x \(\frac 5{100}\)) = ₹30,000
3. Calculation of Profit Share of each Partner
Profit available for distribution = 2,85,000 − 60,000 − 70,000 = ₹1,55,000
X's Share of Profit = ₹(1,55,000 x \(\frac 35\)) = ₹93,000
Y's Share of Profit = ₹(1,55,000 x \(\frac 25\)) = ₹62,000
