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There are two partners a and b there profit sharing ratio is 3:2 and their capitals are 500000 and 600000as on 31st march2019 after debit of drawings during the year of 150000 and100000 net profit for year ended 31st march2019 was 500000 interest on capital is to allowed @10%p.a?
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There are two partners a and b there profit sharing ratio is 3:2 and t...
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Profit Sharing Ratio and Capital of Partners

  • Partners: A and B

  • Profit Sharing Ratio: 3:2

  • Capital of A: 500000

  • Capital of B: 600000



Drawings and Net Profit for the Year Ended 31st March 2019

  • Drawings during the year: 150000 (A) and 100000 (B)

  • Net Profit for the Year Ended 31st March 2019: 500000



Interest on Capital

  • Interest on Capital to be allowed at the rate of 10% per annum



Solution:
To calculate the profits, we need to adjust the drawings of the partners from their capital accounts. The capital accounts of A and B will appear as follows:

Capital Accounts of A and B as on 31st March 2019










































Particulars A B
Capital as on 1st April 2018 500000 600000
Add: Additional Capital Introduced during the year - -
Less: Drawings during the year (150000) (100000)
Interest on Capital @10% p.a 50000 60000
Profit Sharing Ratio 3:2 3:2
Net Profit for the year ended 31st March 2019 300000 200000
Total 710000 660000


Calculation of Profit


  • Profit Sharing Ratio of A and B = 3:2

  • Total Profit = 500000



A's share of profit = 3/5 * 500000 = 300000

B's share of profit = 2/5 * 500000 = 200000

Interest on Capital


  • Interest on Capital to be allowed at the rate of 10% per annum

  • Interest on A's Capital = 10% of 500000 = 50000

  • Interest on B's Capital = 10% of 600000 = 60000



Therefore, A's
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There are two partners a and b there profit sharing ratio is 3:2 and their capitals are 500000 and 600000as on 31st march2019 after debit of drawings during the year of 150000 and100000 net profit for year ended 31st march2019 was 500000 interest on capital is to allowed @10%p.a?
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There are two partners a and b there profit sharing ratio is 3:2 and their capitals are 500000 and 600000as on 31st march2019 after debit of drawings during the year of 150000 and100000 net profit for year ended 31st march2019 was 500000 interest on capital is to allowed @10%p.a? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about There are two partners a and b there profit sharing ratio is 3:2 and their capitals are 500000 and 600000as on 31st march2019 after debit of drawings during the year of 150000 and100000 net profit for year ended 31st march2019 was 500000 interest on capital is to allowed @10%p.a? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for There are two partners a and b there profit sharing ratio is 3:2 and their capitals are 500000 and 600000as on 31st march2019 after debit of drawings during the year of 150000 and100000 net profit for year ended 31st march2019 was 500000 interest on capital is to allowed @10%p.a?.
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