Ram, Raj and George are partners sharing profits in the ratio 5 : 3 : 2. According to the partnership agreement George is to get a minimum amount of Rs. 10,000 as his share of profits every year. The net profit for the year 2013 amounted to Rs, 40,000. Prepare the Profit and Loss Appropriation Account.

Answer

Profit transferred to Ram’s Capital Rs.18,750 Raj’s Capital Rs.11,250 and George’s Capital Rs.10,000