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Mahesh and Ramesh were partners in a firm sharing profits in the ratio of 5: 3. Their capital was₹ 3,00,000 and 2,00,000 respectively. The partnership deedprovided that: (a) Interest on capital should be allowed @ 12% per annum.
(b) A commission of 5% of net profit should be allowed to Ramesh.The net profit for the year was 1,23,000. Prepare Profit & Loss Appropriation Accoun?
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Mahesh and Ramesh were partners in a firm sharing profits in the ratio...
Profit & Loss Appropriation Account

Calculation of Interest on Capital:
Mahesh's capital = ₹ 3,00,000
Ramesh's capital = ₹ 2,00,000
Total capital = ₹ 5,00,000
Interest on Mahesh's capital = 3,00,000 * 12% = ₹ 36,000
Interest on Ramesh's capital = 2,00,000 * 12% = ₹ 24,000

Calculation of Commission for Ramesh:
Net profit = ₹ 1,23,000
Commission for Ramesh = 5% of ₹ 1,23,000 = ₹ 6,150

Profit & Loss Appropriation Account:
Income:
Net Profit = ₹ 1,23,000
Interest on Mahesh's Capital = ₹ 36,000
Interest on Ramesh's Capital = ₹ 24,000
Total Income = ₹ 1,83,000
Expenses:
Commission to Ramesh = ₹ 6,150

Net Profit after Appropriation:
Total Income - Total Expenses = ₹ 1,83,000 - ₹ 6,150 = ₹ 1,76,850
Therefore, the Net Profit after Appropriation is ₹ 1,76,850. This amount will be distributed between Mahesh and Ramesh as per their profit-sharing ratio of 5:3.
This calculation ensures that each partner receives their share of the profit after taking into account interest on capital and any additional commission as per the partnership deed.
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Mahesh and Ramesh were partners in a firm sharing profits in the ratio of 5: 3. Their capital was₹ 3,00,000 and 2,00,000 respectively. The partnership deedprovided that: (a) Interest on capital should be allowed @ 12% per annum.(b) A commission of 5% of net profit should be allowed to Ramesh.The net profit for the year was 1,23,000. Prepare Profit & Loss Appropriation Accoun?
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Mahesh and Ramesh were partners in a firm sharing profits in the ratio of 5: 3. Their capital was₹ 3,00,000 and 2,00,000 respectively. The partnership deedprovided that: (a) Interest on capital should be allowed @ 12% per annum.(b) A commission of 5% of net profit should be allowed to Ramesh.The net profit for the year was 1,23,000. Prepare Profit & Loss Appropriation Accoun? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Mahesh and Ramesh were partners in a firm sharing profits in the ratio of 5: 3. Their capital was₹ 3,00,000 and 2,00,000 respectively. The partnership deedprovided that: (a) Interest on capital should be allowed @ 12% per annum.(b) A commission of 5% of net profit should be allowed to Ramesh.The net profit for the year was 1,23,000. Prepare Profit & Loss Appropriation Accoun? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mahesh and Ramesh were partners in a firm sharing profits in the ratio of 5: 3. Their capital was₹ 3,00,000 and 2,00,000 respectively. The partnership deedprovided that: (a) Interest on capital should be allowed @ 12% per annum.(b) A commission of 5% of net profit should be allowed to Ramesh.The net profit for the year was 1,23,000. Prepare Profit & Loss Appropriation Accoun?.
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