The Partnership agreement between Maneesh and Girish provides that: (i) Profits will be shared equally; (ii) Maneesh will be allowed a salary of 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% p.a. 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 1,00,000 and 80,000 respectively. Their annual drawings are 16,000 and 14,000 respectively. The net profit for the year ending March 31, 2013 amounted to 40,000. Prepare firm’s Profit and Loss Appropriation Account. 

Browse free questions and answers by Chapters

• 1 Introduction to Accounting
• 2 Bank Reconciliation Statement
• 3 Financial Statements I
• 4 Application of Computers in Accounting
• 5 Basic Accounting Terms
• 6 Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards (IFRS)
• 7 Bases of Accounting
• 8 Accounting Equation
• 9 Accounting Procedures - Rules of Debit and Credit
• 10 Origin of Transactions - Source Documents and Preparation of Vouchers
• 11 Journal
• 12 Ledger
• 13 Special Purpose Books I - Cash Book
• 14 Special Purpose Books II - Other Books
• 15 Trial Balance
• 16 Depreciation
• 17 Provisions and Reserves
• 18 Accounting for Bills of Exchange
• 19 Rectification of Errors
• 20 Financial Statements of Sole Proprietorship
• 21 Adjustments in Preparation of Financial Statements
• 22 Accounts from Incomplete Records - Single Entry System