Question 77 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 77 Chapter 2 of +2-A

Question 77 Chapter 2 of +2-A

77. A, B and C were in partnership sharing profits and losses in the ratio of 4 : 2 : 1. It was provided that C’s share in profit for a year would not be less than 7,500. Profit for the year ended 31st March 2019 amounted to 31,500. You are required to show the appropriation among the partners. The profit and Loss Appropriation Account is not required.

The solution of Question 77 Chapter 2 of +2-A

:

Balance Sheet (for the year ended 31st March 2019)
Liabilities
Amount Assets
Amount
      By Profit and Loss A/c 31,500
To Profit Transferred to *2        
A’s Capital A/c 16,000      
B’s Capital A/c 8,000      
C’s Capital A/c 7,500 31,500    
    31,500     31,500

 


Working Note: –

 

 

*1 Calculation of Remuneration to C as a Manager

Profit for the year =  31,500/-
Profit-sharing ratio = 4: 2: 1

C is given a guarantee of a minimum profit of Rs 7,500

A’s Share of Profit 31,500 X 4  
7  

A’s Share of Profit= 18,000

B’s Share of Profit 31,500 X 2
7

B’s Share of Profit= 9,000

C’s Share of Profit 31,500 X 1
7

C’s Share of Profit = 4,500


C’s Profit Share 6,44,000 X 1
5
  = 1,28,800/-    

C’s Actual Profit Share i.e. Rs 4,500 is less than his Minimum Guaranteed Profit i. e. Rs7, 500

Deficiency in C’s Profit Share = 7,500 − 4,500 = Rs 3,000
This deficiency is to be borne by A and B in their profit sharing ratio i.e. 4 : 2

A’s Share of Profit 3,000 X 4
7

A’s Share of Profit = 2,000


B’s Share of Profit 3,000 X 2
7


B’s Share of Profit = 1,000

Now, Final distributed among the partners

A’s Share of Profit 18,000-2,000  
  = 18,000  

 

B’s Share of Profit 9,000- 1,000
  = 8,000

 

C’s Share of Profit 4,500 – 3,000
  = 7,500

 

Also, Check out the solved question of previous Chapters: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 77 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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