Question

E, F and G share profits in the ratio of 4: 3:2. G is given a guarantee that his share of profits will not be less than 375,000. Deficiency if any, would be borne by E and F equally. Firm's profit was 32,70,000. F's share of profit will be:*​

Answer 1

Correct question:

E, F and G share profits in the ratio of 4:3:2. G is given a guarantee that his share of profits will not be less than Rs 75,000. Deficiency if any, would be borne by E and F equally. The firm's profit was Rs 2,70,000. F's share of profit will be:

Given data:

• E, F and G are partners in a firm, sharing profits and losses in the ratio 4:3:2.
• G is guaranteed a minimum profit of Rs 75,000.
• Any deficiency arising will be met by E and F equally.
• The profit for the year was Rs 2,70,00.

To find: F's share of profit.

Answer:

Profit distribution of each partner:

• E = 4/9 of the profits
• F = 3/9 of the profits
• G = 2/9 of the profits

Calculation of profit shares:

For E:

• Profit share = Rs 2,70,000 × 4/9 = Rs 1,20,000

For F:

• Profit share = Rs 2,70,000 × 3/9 = Rs 90,000

For G:

• Profit share = Rs 2,70,000 × 2/9 = Rs 60,000

Deficiency of G = Guaranteed profit - Actual profit acquired

Deficiency of G = Rs 75,000 - Rs 60,000

Deficiency of G = Rs 15,000

Since the deficiency is to be met by E and F equally, it will be met in the ratio 1:1.

From E, G gets:

• Rs 15,000 × 1/2 = Rs 7,500

From F, G gets:

• Rs 15,000 × 1/2 = Rs 7,500

Corrected profit shares:

For E:

• Profit share = Rs 1,20,000 - Rs 7,500 = Rs 1,12,500

For F:

• Profit share = Rs 90,000 - Rs 7,500 = Rs 82,500

For G:

• Profit share = Rs 60,000 + Rs 15,000 = Rs 75,000

Therefore, F's share of profit is Rs 82,500.