Question 84 Chapter 2 of +2-A
84. A, B and C are partners in a firm sharing profits in the ratio of 3 : 2 : 1. They earned a profit of
30,000 during the year ended 31st March, 2019. Distribute profit among A, B and C if:
a C’s share of profit is guaranteed to be 6,000 Minimum.
b Minimum profit payable to C amounting to 6,000 is guaranteed by A.
c Guaranteed minimum profit of 6,000 payable to C is guaranteed by B.
d Any deficiency after making payment of guaranteed 6,000 will be borne by A and B in the ratio of 3 : 1.
The solution of Question 84 Chapter 2 of +2-A:
Case A
| Balance Sheet (for the year ended 31st March 2019) |
|||||
| Liabilities |
Amount | Assets |
Amount | ||
| By Profit and Loss A/c | 30,000 | ||||
| To Profit Transferred to *2 | |||||
| A’s Capital A/c | 14,400 | ||||
| B’s Capital A/c | 9,600 | ||||
| C’s Capital A/c | 6,000 | 30,000 | |||
| 30,000 | 30,000 | ||||
Working Note: –
*1Calculation of distribution of Profits for the among the partners
Profit for year = 30,000
Profit-sharing ratio = 3: 2: 1
C is given a guarantee of a minimum profit of Rs 6,000
Anshu admitted for share = 1/6th share in profits
| A’s Share of Profit | 30,000 | X | 3 |
| 6 |
A’s Share of Profit = 15,000
| B’s Share of Profit | 30,000 | X | 2 |
| 6 |
B’s Share of Profit = 10,000
| C’s Share of Profit | 30,000 | X | 2 |
| 6 |
C’s Share of Profit = 5,000
C’s Actual Profit Share i. e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share= 6,000 − 5,000= Rs 1,000
This deficiency is to be borne by A and B in their profit sharing ratio i.e. 3: 2
This deficiency is to be borne by A and B in their profit sharing ratio i.e. 3: 2
| A’s Share of Profit | = | 1,000 | X | 3 |
| 5 |
A’s Share of Profit= 600
| B’s Share of Profit | = | 1,000 | X | 2 |
| 5 |
B’s Share of Profit= 400
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Now, Final distributed among the partners
| A’s Share of Profit | = | 15,000 | – | 600 | =14,400 |
| B’s Share of Profit | = | 10,000 | – | 400 | =9,600 |
| C’s Share of Profit | = | 5,000 | + | 1,000 | =6,000 |
Case B
| Balance Sheet (for the year ended 31st March 2019) |
|||||
| Liabilities |
Amount | Assets |
Amount | ||
| By Profit and Loss A/c | 30,000 | ||||
| To Profit Transferred to *2 | |||||
| A’s Capital A/c | 14,000 | ||||
| B’s Capital A/c | 10,000 | ||||
| C’s Capital A/c | 6,000 | 30,000 | |||
| 30,000 | 30,000 | ||||
C’s Actual Profit Share i.e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share = 6,000 − 5,000 = Rs 1,000
This deficiency is to be borne by A
Now, Final distributed among the partners
| A’s Share of Profit | = | 15,000 | – | 1,000 | =14,000 |
| B’s Share of Profit | = | 10,000 | – | 0 | =10,000 |
| C’s Share of Profit | = | 5,000 | + | 1,000 | =6,000 |
Case C
| Balance Sheet (for the year ended 31st March 2019) |
|||||
| Liabilities |
Amount | Assets |
Amount | ||
| By Profit and Loss A/c | 30,000 | ||||
| To Profit Transferred to *2 | |||||
| A’s Capital A/c | 15,000 | ||||
| B’s Capital A/c | 9,000 | ||||
| C’s Capital A/c | 6,000 | 30,000 | |||
| 30,000 | 30,000 | ||||
C’s Actual Profit Share i.e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share = 6,000 − 5,000 = Rs 1,000
This deficiency is to be borne by B
Now, Final distributed among the partners
| A’s Share of Profit | = | 15,000 | – | 0 | =15,000 |
| B’s Share of Profit | = | 10,000 | – | 1,000 | =9,000 |
| C’s Share of Profit | = | 5,000 | + | 1,000 | =6,000 |
Case d
| Balance Sheet (for the year ended 31st March 2019) |
|||||
| Liabilities |
Amount | Assets |
Amount | ||
| By Profit and Loss A/c | 30,000 | ||||
| To Profit Transferred to *2 | |||||
| A’s Capital A/c | 14,250 | ||||
| B’s Capital A/c | 9,750 | ||||
| C’s Capital A/c | 6,000 | 30,000 | |||
| 30,000 | 30,000 | ||||
C’s Actual Profit Share i.e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share= 6,000 − 5,000= Rs 1,000
This deficiency is to be borne by A and B in ratio i.e. 3: 1
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| A’s Share of Profit | = | 1,000 | X | 3 |
| 4 |
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A’s Share of Profit= 750
| B’s Share of Profit | = | 1,000 | X | 2 |
| 4 |
B’s Share of Profit= 250
| A’s Share of Profit | = | 15,000 | – | 750 | =14,250 |
| B’s Share of Profit | = | 10,000 | – | 250 | =9,750 |
| C’s Share of Profit | = | 5,000 | + | 1,000 | =6,000 |
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
