Question

84. A, B and Centered into partnership on 1st April, 2009 to share profits and losses in the ratio of 5:3:2.
Aguaranteed that C's share of profit, after charging interest on capital @ 5% p.a., would not be less than
15,000 in any year.
The capitals were as follows:
A1,60,000; B-3 1,00,000 and C-80,000.
Profit for the year ended 31st March, 2015 amounted to 79,500 before providing for interest on capital.
Show Profit and Loss Appropriation Account.
[Ans.: Share of Profit: A-28,750; B-18,750; C-15,000.​

Answer 1

Answer: Calculate int. On capital

160000*5/100=8000

100000*5/100=5000

80000*5/100=4000

toatal int.on capital=17000

Profit of the yrs =79500

Deduct=79500-17000=62500

divide profit among partners

62500*5/10=31250

62500*3/10=18750

62500*2/10=12500

C profit less then 15000 then A's personally bear this loss of C'

So, there is 2500 is less in C'profit

Therefore, 2500 must be deduct from A'profit

So, 31250-2500=28750

And 2500 added to C's profit...

Profit share among partners

A's profit share=28750

B's profit share=18750

C's profit share=15000

Explanation: