P/l appropriation

firm's profit should not be less than 70000 before charging or allowing interest and salary payable. Actual profit of the firm is 64000.

So., what amount of profit should I take in cr. Side of p/l appropriation a/c

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Quick Summary
This discussion addresses a scenario where a firm's actual profit (£64,000) is less than the required minimum profit (£70,000) before accounting for partner interest and salary. The user is seeking clarification on how to record the profit in the P/L appropriation account and determine the correct amounts for interest and salary when the profit falls short. The advice provided suggests deducting interest and salary expenses from the minimum profit figure to arrive at the net profit available to partners.

What is the amount of interest and salary?
Originally posted by : Rachana Jha
firm's profit should not be less than 70000 before charging or allowing interest and salary payable. Actual profit of the firm is 64000.So., what amount of profit should I take in cr. Side of p/l appropriation a/c

Int on capital -21000

Int on drawings-1850

Salary-20000

From 70000 rupees deduct the interest and salary expenses of partners in P/L appropriation account and then the net profit available to partners shall be arrived

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