Profit as per profit and loss account is (₹140000). Interest on partner's loan (₹8000) has not yet been deducted. What is the profit available for appropriation?

Correct answer: (₹132000)

Direct answer: Option B, ₹132,000. Profit shown by the Profit and Loss Account is ₹140,000. Interest on a partner’s loan is a business charge, not an appropriation of profit. Therefore it must be deducted before the remaining profit is distributed among partners. Step 1: start with ₹140,000. Step 2: deduct loan interest of ₹8,000. Step 3: ₹140,000 − ₹8,000 = ₹132,000. Option A, ₹148,000, is wrong because it adds the interest instead of deducting it. Option B, ₹132,000, is correct because loan interest reduces profit before appropriation. Option C, ₹140,000, is wrong because it ignores the unpaid interest expense. Option D, ₹8,000, is only the amount of interest, not the profit left for appropriation. Remember: interest on a partner’s loan is a charge against profit; first calculate profit after this charge, and only then make appropriations such as partner salary, commission or interest on capital.