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Question 22 Chapter 2 - Unimax Class 12 Part 1
22. A and B are partners sharing profits in the ratio of 3 : 2 with capitals of Rs. 50000 and Rs. 30000 respectively. Interest on Capital is agreed at 6% per annum. B is to be allowed an annual salary of Rs. 2500. During 2021 the profits of the year prior to calculation of interest on capital but after charging B’s salary amounted to Rs. 12500.
A provision of 5% of the profits (before charging any commission) is to be made in respect of A’s Commission.
Prepare an account showing allocation of profits and partners’ capital accounts.
Profit & Loss of Appropriation A/c For the year ended 31st Dec., 2021
| Particulars | Rs. | Particulars | Rs. | |
|---|---|---|---|---|
| To Interest on Capital | By Net Profit | 12500 | ||
| A | 3000 | |||
| B | 1800 | 4800 | ||
| To A’s Capital A/c (Commission) (Rs. 12500 – Rs. 4800) x 5/100 |
385 | |||
| To Profit transferred to capital A/cs | ||||
| A | 4389 | |||
| B | 2926 | 7315 | ||
| 12500 | 12500 |
Capital Accounts
| Particulars | A | B | Particulars | A | B |
|---|---|---|---|---|---|
| To Balance o/d | 57774 | 37226 | By Balance b/d | 50000 | 30000 |
| By Interest on capital | 3000 | 1800 | |||
| By Commission A/c | 385 | - | |||
| By Salary A/c | - | 2500 | |||
| By Profit & Loss appropriation A/c | 4389 | 2926 | |||
| 57774 | 37226 | 57774 | 37226 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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6 February 2026