X,Y, and Z are partners in firm with respective capitals of rs. 50000. Rs. 30000 and rs. 20000. According to the a partnership deed each partner in entitled to interest on capital @5% p.a. and salary of rs. 1000 p.a. of the net divisible profit, the profit and lose a/c for the year ended disclosed a net profit of rs. 25000. Prepare profit and lose appropriation account.
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interest on X's capital = 50,000×5/100 = 2500
interest on Y's capital = 30,000×5/100 = 1500
interest on Z's capital = 20,000×5/100 = 1000
salary to each partner = 1000×3 = 3000
available profit = 25,000 - 8000 = 17,000
profit to each partner = 5667
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