A and B were partners sharing profits in the ratio of 7 : 3. On 1st April, 2016, their capitals were Rs 1,00,000, Rs 40,000 respectively. Interest is to be charged on capital and drawings at 10% per annum. B is to be allowed salary Rs 1,000 per month. A and B withdrawn Rs 1,000 and Rs 600 per month respectively on the first day of every month. The profits for the year, prior to calculation of interest on capitals and drawings, but after charging B’ salary, amounted to Rs 54,960. A provision for A’ commission at 5% on net profit (after charging such commission) is to be made. Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2017.
