Question 78 Chapter 2 of +2-A
78. A and B are partners sharing profits in the ratio of 3: 2. C was admitted for 1/6th share of profit with a minimum guaranteed amount of 10,000. At the close of the first financial year, the firm earned a profit of 54,000. Find out the share of profit which A, B and C will get.
The solution of Question 78 Chapter 2 of +2-A:
| Balance Sheet (for the year ended 31st March 2019) |
|||||
| Liabilities |
Amount | Assets |
Amount | ||
| By Profit and Loss A/c | 54,000 | ||||
| To Profit Transferred to *2 | |||||
| A’s Capital A/c | 26,400 | ||||
| B’s Capital A/c | 17,600 | ||||
| C’s Capital A/c | 10,000 | 54,000 | |||
| 54,000 | 54,000 | ||||
Working Note: –
C will get higher of the two:
i Share of Profit as per profit sharing ratio, i.e.,
| = | 54,000 | X | 1 | ||
| 6 |
= 9,000
ii Minimum guaranteed profit, i.e. Rs 10,000
Thus from a net profit of Rs 54,000, minimum guaranteed profit to C of Rs 10,000 is to be adjusted first. And the balance profit of Rs 44,000 54, 000– 10, 000 is to be shared by A and B in the ratio 3:2
| A’s Share of Profit | = | 44,000 | X | 3 |
| 5 |
A’s Share of Profit = 26,400
| B’s Share of Profit | = | 44,000 | X | 2 |
| 5 |
B’s Share of Profit = 17,600
C’s Share of Profit = 10,000 (minimum guaranteed profit)
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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
