Question

Q.9 A, B and C are partners in a firm. On 1st April,2016, the balance in their capital accounts stood at 4,00,000; 3,00,000 and 2,00,000 respectively. They shared profits in the proportion of 5:3:2 respectively. A’s share of profits is guaranteed at not less than 12,500 p.a. The firm suffered losses of 10,000 during the year ended 31st March,2017. Show the Journal entries for the distribution of profit or loss.

Answer 1

B's capital a/c Dr. 7500
C's capital a/c Dr. 5000
.......To A's capital a/c 12500
(Being guaranteed profit transferred to A's capital & losses adjusted B's & C's capital )