QUESTION: 79
Parul, Prerna and Kaushal are partners sharing profits equally. Parul is guaranteed minimum annual profit of ₹ 2,00,000. Kaushal is to get Commission@ 5% of Net Sales and the commission is determined at ₹50,000.
Net Profit for the year ended 31st March, 2022 is ₹ 2,50,000.
Prepare Profit & Loss Appropriation Account for the year.
Answer:
Working Notes:
Share of each partner 2,00,000 ÷ 3 = 66,666.67
Note: Share of each partner is less than guarantee but divisible profit is equal to guarantee, hence whole divisible profit should be credited to Parul’s Capital A/c
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