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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his minimum share of profit in any given year would be at least ₹50,000. Deficiency, if any, would be borne by A and B equally. Profit for the year ended 31st March, 2025 was ₹4,00,000. Pass the necessary Journal entries in the books of the firm.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2025 Mar 31 | Profit & Loss Appropriation A/c Dr. | 4,00,000 | ||
| To A’s Capital A/c | 1,95,000 | |||
| To B’s Capital A/c | 1,55,000 | |||
| To C’s Capital A/c | 50,000 | |||
| (Profit distributed after meeting C’s guarantee) |
Working Notes: Normal shares (5 : 4 : 1) = A ₹2,00,000, B ₹1,60,000, C ₹40,000. C’s deficiency = ₹50,000 – ₹40,000 = ₹10,000, borne by A and B equally (₹5,000 each). Final shares: A ₹1,95,000, B ₹1,55,000, C ₹50,000.
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Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 1 Q.79 - Accounting for Partnership Firm Fundamentals", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Accounting for Partnership Firm – Fundamentals.
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