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 Rs. 20,000 in proportion to their capitals.
b) The Next Rs. 30,000 in the ratio of 5:3:2.
c) Remaining profits to be shared equally.
The firm earned net profit of Rs. 1,72,000 before charging any of the above items. Prepare Profit & Loss Appropriation A/c and pass necessary Journal entry for the appropriation of profits.