Question

John and Mathew are partners Shares profit and loss in the 3:2 Ratio. They admit Ramesh for 1/6

share in profit. John personally guaranteed that Ramesh’s shares of profit after charging interest on

capital @10% per annum would not be less than ₹ 30,000 in any year. The capital of John, Mathew

and Ramesh are ₹2,50,000 ₹2,00,000 and ₹ 1,50, 000.The profit for the year is ₹ 1,50,000 before

providing interest on capital. Prepare the Profit and loss appropriation Account if new profit-sharing

ratio is 3:2:1​

Answer 1

Answer:

3:21 is correct answer

Answer 2

Answer:

Ramesh 15,000+(15,000)form john's Capital

Explanation:

TO Interest on capital

john-25,000

Mathew-20,000

Ramesh-15,000

TO Balance Profit transferred to:

To John Capital - 45,000-15,000(Subtract to John Capital)

[because john is guarantee that Ramesh share Profit After charge IOC 10 percent p.a. not less than 30,000] This is No require but you have knowledge of this point.why are subtract 15,000

This is No require but you have knowledge of this point.why are subtract 15,000in john capital

To Mathew Capital-15,000

To RameshCapital- 15,000+john's capital(15,000)

Net profit-1,50,000

working Note:-

Calculate IOC:

john-2,50,000×10percent(10÷100)=25,000

Mathew-2,00,000×10÷100(above discuss)=20,000

Ramesh-1,50,000×10÷100=15,000

Calculate Ramesh share profit:

1,50,000(Net profit)- 60,000(IOC:25,000+20,000+15,000) = 90,000

90,000×1÷6(share in profit)=15,000

remaining 15,000 is deficiency

John is guarantee than Ramesh share profit not less than 30,000 so any deficiency Paid by John his capital.

so, John capital is rupees 45,000-15,000(deficiency)=30,000

Ramesh share profit: capital=15,000+15,000(deficiency)=30,000