A, B and C were partners in a firm. On 1st April, 2018 the balance in their capital accounts stood at 8,00,000, 6,00,000 and 4,00,000 respectively. As per the provisions of the partnership deed, partners were entitled to interest on capital @ 5% p.a., salary to B 3,000 per month and a commission of 12,000 to C.

A’s share of profit, excluding interest on capital, was guaranteed at 25,000 p.a. B’s share of profit, including interest on capital but excluding salary was guaranteed at 55,000 p.a. Any deficiency arising on that account was to be met by C. The profits of the firm for the year ending 31st March, 2019 amounted to 2,16,000.

Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2019. 

Marks-4, CBSE:2019-20/Compartment/Q-16*

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