A and B are partners sharing profits and losses in the ratio of 3:1. On 1st April, their capitals were: A Rs. 5,00,000 and B Rs. 3,00,000. During the year ended 31st March, the firm earned a net profit of Rs. 5,00,000. The terms of partnership are:
a) Interest on capital is to be allowed @6% p.a.
b) A will get a commission @2% on net sale.
c) B will get a salary of Rs. 5,000 per month.
d) B will get commission of 5% on profits after deduction of all expenses including such commission.
Partner’s drawings for the year were: A Rs. 80,000 and B Rs. 60,000. Net Sales for the year was Rs. 30,00,000. After considering the above facts, you are required to prepare Profit & Loss Appropriation A/c and Partners’ Capital Accounts.