Question

A, B and C are partners in a firm sharing
profit & loss in the ratio of 2:2: 1. As per
partnership deed, C has been guaranteed a
minimum of Rs. 12,000 as profit. Any excess
payable to C on account of guarantee shall
be borne by A. Prepare Profit & Loss
Appropriation Account if the profit is (i) Rs.
50,000, and (ii) Rs.80,000.
How much amount of profit transfer
from A to C when Profit is Rs.
50,000.?​

Answer 1

Answer:

PROFIT AND LOSS APPROPRIATION ACCOUNT FOR THE YEAR 2017

Particulars Amount Particulars Amount

To Profit transferred to-

A's capital A/c- 16000

B's capital A/c-16,000

Less:deficiency-(2000)

C's capital A/c-8000

Add:share 2000 40,000 By net profit 40,000

Total 40,000 Total 40,000

PROFIT AND LOSS APPROPRIATION ACCOUNT FOR THE YEAR 2018

Particulars Amount Particulars Amount

To profit transferred to-

A's capital A/c-24,000

B's capital A/c-24,000

C's capital A/c-12,000 60,000 By net profit 60,000

Total 60,000 Total 60,000

Was this answer helpful?