Accountancy, asked by ankitanjaliverma, 16 days ago

a b and c are partner in a firm their profit sharing ratio is 3:2:1 however c is guaranteed a minimum amount of ₹10000 as share of profits every year any deficiency arising on that amount shall be met by A the profits for the two years ending 31st March 2019 and 2020 were ₹30000 and ₹90000 respectively prepare profit and loss appropriation account for the two years

Answers

Answered by Equestriadash

Given data:

A, B and C are partners sharing profits and losses in the ratio 3:2:1.
C is guaranteed a minimum profit of Rs 10,000.
Any deficiency arising is to be met by A.
The profits for the years 2019 and 2020 are Rs 30,000 and Rs 90,000 respectively.

Objective: To prepare a Profit & Loss Appropriation A/c.

Answer:

For the year ending 31st March, 2019:

Let's first calculate the profit shares of each partner.

As per the question, the profits are shared in the ratio 3:2:1. Hence, they must be distributed accordingly.

For A:

For B:

For C:

As per the question, C is guaranteed a profit of at least Rs 10,000. C gets Rs 5,000 instead. Let's calculate the deficiency.

Deficiency of C = Guaranteed profit to C - Actual profit acquired by C

Deficiency of C = Rs 10,000 - Rs 5,000

Deficiency of C = Rs 5,000

Since the deficiency is to be met by A, the deficiency will be subtracted from A's profit and added to C's profit.

The corrected profit shares will therefore be:

For A:

For B:

For C:

For the year ending 31st March, 2020:

Let's first calculate the profit shares of each partner.

The ratio is still the same, so the profit will again be distributed accordingly.

For A:

For B:

For C:

Since there is no deficiency arising in C's amount, there is no need for further adjustments.

The Profit & Loss Appropriation Accounts for both years have been attached below.

Attachments:

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