X Y and Z are partner in the forms sharing profit and losses in the ra...
Profit and Loss Appropriation Account for the year ending 2014
Calculation of Net Profit before charging commissions:
- Total Sales: $330,000
- X's Commission (2% on sales): $6,600
- Y's Commission (10% on sales): $33,000
- Net Profit before charging commissions: $330,000 - $6,600 - $33,000 = $290,400
Calculation of Net Profit after charging X's commission:
- X's Salary: $6,000
- X's Commission (10% on sales): $33,000
- Total X's Commission: $6,600 (from profit sharing) + $33,000 = $39,600
- Net Profit after charging X's commission: $290,400 - $6,000 - $39,600 = $244,800
Profit and Loss Appropriation Account:
- Net Profit before charging commissions: $290,400
- Less: X's Commission: $39,600
- Net Profit after charging commissions: $244,800
- Less: Y's Commission: $33,000
- Remaining Profit for distribution: $211,800
Profit distribution according to profit-sharing ratio (3:2:1):
- X's share: $211,800 * 3/6 = $105,900
- Y's share: $211,800 * 2/6 = $70,600
- Z's share: $211,800 * 1/6 = $35,300
This is how the Profit and Loss Appropriation Account for the year ending 2014 would look like based on the given information.
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