If profit is thirty thousand rupees and interest on drawings is two thousand rupees what is total amount available for appropriation?

Correct answer: Thirty two thousand rupees

The direct answer is option A: Rs 32000. For appropriation, start with the firm’s profit and include interest on drawings because that interest is income earned by the firm from the partner. Step 1: profit = Rs 30000. Step 2: interest on drawings = Rs 2000. Step 3: total amount available for appropriation = Rs 30000 + Rs 2000 = Rs 32000. This amount may then be used for items such as interest on capital, partner salary, commission, and distribution of the remaining profit, according to the partnership agreement. Option A is correct. Option B, Rs 28000, subtracts interest on drawings, but that interest is an income or gain of the firm and must be added. Option C, Rs 30000, ignores the additional income. Option D, Rs 2000, includes only the interest and ignores the original profit. The calculation assumes that the stated profit is before adding interest on drawings, which is the normal interpretation of this question. Memory cue: interest on drawings comes into the firm, so add it to profit available for appropriation.