A,B and C were partners in a firm having capitals of Rs 60,000 Rs 60,000 and Rs 80,000 respectively. There current account balance were A10,000 , B5000 and C2000 (Dr.).According to the partnership deed the partners were entitled to an intt. on capital @ 5% p.a. C being the working partner was also entitled to a salary of Rs 6,000 p.a. The profits were to be divided as follows:
(i)The first Rs 20,000 in proportion to their capitals.
(ii)next Rs 30,000 in the ratio of 5:3:2.
(iii)remaining profits to be shared equally.
During the year the firm made a profit of Rs 1,56,000 before charging any of the above items. prepare the profit and loss appropriation on A/C.
Profit and Loss Appropriation Account for the year ended  
Dr. 

 Cr.  
Particulars  Amount Rs  Particulars  Amount Rs  
Interest on Capital A/c: 
 Profit and Loss A/c  1,56,000  
A  3,000 


 
B  3,000 


 
C  4,000  10,000 

 
C( Salary)  6,000 

 
Profit transferred in Capital Ratio to: 


 
A’s Capital A/c  6,000 


 
B’s Capital A/c  6,000 


 
C’s Capital A/c  8,000  20,000 

 
Profit transferred in 5:3:2 to: 


 
A’s Capital A/c  15,000 


 
B’s Capital A/c  9,000 


 
C’s Capital A/c  6,000  30,000 

 
Profit transferred equally to: 


 
A’s Capital A/c  30,000 


 
B’s Capital A/c  30,000 


 
C’s Capital A/c  30,000  90,000 

 
 1,56,000 
 1,56,000  



