How to prepare profit and loss appropriation account?

X Y and Z are in a partnership with capitals of Rs.480000(credit) and Rs.400000(credit) and Rs.32000 (debit) respectively on 1st April,2015. They share profits in the ratio of 2:1:1.
Their partnership deed provides the following:
(i) Partners are to be allowed interest on capitals @5% p.a. and are to charged interest on drawings @6% p.a.
(ii) X is entitled to a remuneration of 10% of the net profit for customers relationship work.
(iii) Y is also entitled to commission of 10% of the net profit after charging remuneration to X as per clause (ii) above
(iv) Z is entitled to a rent of Rs.4000 per month for the use of his premises by the firm.
During the year, X withdrew Rs.800 in the beginning of every month, Y withdrew Rs.1200 during the month and Z Rs.1600 at the end of every month.
Net profit of the firm for the year ended 31st March, 2016 before providing any of the above clauses was Rs.444000.

asked Mar 2, 2017 in Partnership-Fundamentals by sachi (14 points) 3,174 views

1 Answer

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answered Mar 10, 2017 by jbsclasses (3,971 points)
edited Mar 10, 2017 by jbsclasses