Answer :
Answer:
To prepare the Profit & Loss Appropriation Account for the year ended 31st March 2023, we need to follow a structured approach based on the information provided. Let's go through the calculations step by step.
**Given Information:**
- Profit for the year ended 31st March 2023: ₹7,55,000
- Transfer to General Reserve: ₹2,00,000
- B and C's salary: B - ₹30,000, C - ₹45,000
- A's commission: 10% on divisible profit after charging such commission
- Capital balances on 1st April 2022: A - ₹5,00,000, B - ₹4,00,000, C - ₹3,50,000
- Drawings: A - ₹84,000, B - ₹72,000, C - ₹60,000
- Interest on Drawings: A - ₹4,550, B - ₹3,900, C - ₹3,250
**Step-by-Step Calculation:**
1. **Calculation of Divisible Profit:**
Profit for the year: ₹7,55,000
Less: Transfer to General Reserve: ₹2,00,000
Divisible Profit: ₹7,55,000 - ₹2,00,000 = ₹5,55,000
2. **Calculation of A's Commission:**
A's commission is 10% of the divisible profit after charging such commission. This means we need to calculate A's commission, deduct it from the divisible profit, and then distribute the remaining profit among the partners.
Commission for A = 10% of ₹5,55,000 = ₹55,500
Divisible profit after commission = ₹5,55,000 - ₹55,500 = ₹4,99,500
3. **Preparation of Profit & Loss Appropriation Account:**
```
Profit & Loss Appropriation Account
For the year ended 31st March 2023
Particulars Amount (₹)
--------------------------------------------
Net Profit as per P&L 7,55,000
Less: Transfer to General Reserve 2,00,000
Divisible Profit 5,55,000
A's Commission 55,500
Divisible Profit after Commission 4,99,500
Less: B's Salary 30,000
Less: C's Salary 45,000
Remaining Profit 4,24,500
--------------------------------------------
Total Appropriation 5,55,000
--------------------------------------------
```
**Explanation of A's Commission:**
A's commission is calculated as 10% of the divisible profit after all appropriations (including B and C's salaries and transfer to general reserve). The purpose of deducting A's commission is to determine the amount of profit available for distribution among the partners after all necessary allocations and appropriations have been accounted for. This ensures that A receives compensation based on the profitability of the firm, incentivizing effective management of the business.