A, B and C were partners in a firm having capitals of ₹ 1,00,000; ₹ 1,00,000 and ₹ 2,00,000 respectively. According to the partnership deed the partners were entitled to interest on capital @ 6% p.a. A being the working partner was also entitled to a salary of ₹ 5,000 per month. The profits were to be divided as follows:

(a) The first ₹ 40,000 in the ratio of 2 : 3 : 5.

(b) Next ₹ 80,000 in the proportion of their capitals.

(c) Remaining profits to be shared equally.

The firm made a profit of ₹ 2,70,000 for the year ended 31st March, 2024 before charging any of the above items. Prepare the Profit & Loss Appropriation Account and pass necessary journal entry for apportionment of profits.



Anurag Pathak Answered question May 30, 2024
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