49 :- A, B, and C were partners in a firm having capitals of Rs 50,000; Rs 50,000, and Rs 1,00,000 respectively. Their Current Account balances were A: Rs 10,000; B: Rs 5,000 and C: Rs 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 Rs 12,000 p.a. The profits were to be distributed as:
(a) The first ₹ 20,000 in proportion to their capitals.
(b) Net ₹ 30,000 in the ratio of 5 : 3 : 2.
(c) Remaining profits to be shared equally.
The firm earned a net profit of Rs 1,72,000 before charging any of the above items.
Prepare a Profit and Loss Appropriation Account and Pass the necessary Journal entry for the appropriation of profits.
Solution:-

WORKING NOTES :-
Calculation of distribution of profit
First 20000 : A – Rs 5,000 , B – Rs 5,000 , C – Rs 10,000
Next 30000 in the ratio of 5:3:2 = A – Rs 15,000 , B – Rs 9,000 , C – Rs 6,000
Remaining profits = (1,72,000 – 20,000 – 12,000 – 20,000 – 30,000) = Rs 90,000
70,000 is to be distributed equally: A – Rs 30,000 , B – Rs 30,000 , C – Rs 30,000