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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
P and Q were partners in a firm sharing profits in the ratio of 5 : 3. On 1st April, 2024 they admitted R as a new partner for a 1/8th share in the profits, with a guaranteed profit of ₹75,000. The new profit-sharing ratio between P and Q remains the same, but they agreed to bear any deficiency on account of the guarantee to R in the ratio of 3 : 2. The profit of the firm for the year ended 31st March, 2025 was ₹4,00,000. Prepare the Profit & Loss Appropriation Account of P, Q and R for the year ended 31st March, 2025.
Profit & Loss Appropriation Account (for the year ended 31st March, 2025)
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Profit transferred to Capital A/cs: | By Profit & Loss A/c (Net Profit) | 4,00,000 | |
| P | 2,03,750 | ||
| Q | 1,21,250 | ||
| R | 75,000 | ||
| Total | 4,00,000 | Total | 4,00,000 |
Working Notes: R’s share = ₹4,00,000 × 1/8 = ₹50,000. Remaining ₹3,50,000 in 5 : 3 → P ₹2,18,750, Q ₹1,31,250. R’s deficiency = ₹75,000 – ₹50,000 = ₹25,000, borne by P and Q in 3 : 2 → P ₹15,000, Q ₹10,000. Final: P ₹2,03,750, Q ₹1,21,250, R ₹75,000.
Accounting & Commerce Educator
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.85 - 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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