A, B and C were partners in a firm having capitals of ₹50,000 ; ₹50,000 and ₹1,00,000 respectively. Their Current Account balances were A: ₹10,000; B: ₹5,000 and C: ₹2,000 (Dr.). According to the Partnership Deed the partners were entitled to an interest on Capital @ 10% p.a. C being the working partner was also entitled to a salary of ₹12,000 p.a. The profits were to be divided as: (a) The first ₹20,000 in proportion to their capitals. (b) Next ₹30,000 in the ratio of 5 : 3 : 2. (c) Remaining profits to be shared equally. The firm earned net profit of ₹1,72,000 before charging any of the above items. Prepare Profit and Loss Appropriation Account and pass necessary Journal entry for the appropriation of profits.

 A, B and C were partners in a firm having capitals of   ₹50,000 ;   ₹50,000 and   ₹1,00,000 respectively. Their Current Account balances were A:   ₹10,000; B:   ₹5,000 and C:   ₹2,000 (Dr.). According to the Partnership Deed the partners were entitled to an interest on Capital @ 10% p.a. C being the working partner was also entitled to a salary of   ₹12,000 p.a. The profits were to be  divided as:

(a) The first   ₹20,000 in proportion to their capitals.
(b) Next   ₹30,000 in the ratio of 5 : 3 : 2.
(c) Remaining profits to be shared equally.
The firm earned net profit of   ₹1,72,000 before charging any of the above items.
Prepare Profit and Loss Appropriation Account and pass necessary Journal entry for the appropriation of profits.

👇 Answer👇

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