The PArtnership Agreement Between Maneesh and Girish Provides [SOLUTION]

 The partnership agreement between Maneesh and Girish provides that : 

(i)    Profits will be shared equally;

(ii)   Maneesh will be allowed a salary of Rs 400 p.m;

(iii)  Girish who manages the sales department will be allowed a commission equal to 10% of the net profits, after allowing Maneesh’s salary;

(iv)  7% interest will be allowed on partner’s fixed capital;

(v)   5% interest will be charged on partner’s annual drawings;

(vi)  The fixed capitals of Maneesh and Girish are Rs 1,00,000 and Rs 80,000, respectively. Their annual drawings were Rs 16,000 and 14,000, respectively. The net profit for the year ending March 31, 2015 amounted to Rs 40,000; 
Prepare firm’s Profit and Loss Appropriation Account.

Profit and loss Appropriation A/c

Particulars		Amount (Rs.)	Particulars		Amount (Rs.)
To Partners salary			By Profit and loss		40,000
To Maneesh		4,800	By Interest on Capital
To Partners commission		3,520	Mannesh	800
To Interest on capital			Grish	700	1,500
Mannesh	7,000
Grish	5,600	12,6000
To Profit transfered to
Manneh’s current A/c	10,290
Grish’s current A/c	10,290	20,580
		41,500			41,500

Chapter-2 Partnership Basic: Accounts

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