Question

57. Cook, Broad and Prior are partners in a firm sharing profits and losses in the ratio of 3: 2:1.
Prior is guaranteed an annual profit of * 1,00,000 by the other partners. During the year ended
31st March, 2021 the firm incurred a loss of $60,000. Their respective capitals as on 1st April,
2020 were * 6,00,000; 4,00,000 and 2,00,000. You are required to show the necessary accounts
giving effect to the above.
​

Answer 1

Answer:

To appear the fundamental accounts for the organization firm Cook, Wide and Earlier, we have to be get ready a Benefit and Misfortune Apportionment Account and  Partners' Capital Accounts.

Explanation:

Benefit and Misfortune Allotment Account for the year finished 31st Walk 2021:

Particulars Sum

Misfortune as per Trial Adjust (60,000)

Ensured Benefit:

Earlier 1,00,000

Remaining Misfortune (1,00,000+60,000-1,00,000) (60,000)

Add up to (60,000)

Note:

The guaranteed profit of $1,00,000 for Earlier is paid to begin with and after that the remaining misfortune is shared among the accomplices agreeing to their profit-sharing proportion.

Partners' Capital Accounts as on 31st Walk 2021:

Cook Wide Earlier

Particulars Sum Particulars Sum Particulars Sum

Adjust b/d 6,00,000 4,00,000 2,00,000

Share of Misfortune (36,000) (24,000) (12,000)

Ensured Benefit - - 1,00,000

Adjust c/d 5,64,000 3,76,000 2,88,000

Add up to 5,64,000 Add up to 3,76,000 Add up to 2,88,000

Note:

The partners' capital accounts are balanced for their share of the misfortune and the ensured benefit for Earlier. The adjust carried down (c/d) is the balanced capital as on 31st Walk 2021.

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