A and B are partners in a firm sharing profits or losses in the ratio of 2:3 with capitals of 4,00,000 and 8,00,000 respectively. Each partner is entitled to 10% p.a.
interest on his capital. B is entitled a commission of 10% on net.profit remaining after
deducting interest on capital but before charging any commission. A is entitled a
commission of 8% of net profit remaining after deducting interest on capital and after
charging all commissions. The profit for the year prior to calculation of interest on
capital was 6,00,000.
Prepare Profit and Loss Appropriation Account.