A B and C were partners in a firm sharing profits in the ratio of 3:2:1. B was guaranteeda profitof ₹ 2,00,000 During the year the firm earned a profit of ₹ 84,000, Calculate thenetamount ofProfitorLoss transferredto theCapitalAccounts of AandC.(a)₹87,000 (b)₹29,000 (c)₹25,000 (d)₹75,000
Question
A B and C were partners in a firm sharing profits in the ratio of 3:2:1. B was guaranteeda profitof ₹ 2,00,000 During the year the firm earned a profit of ₹ 84,000, Calculate thenetamount ofProfitorLoss transferredto theCapitalAccounts of AandC.(a)₹87,000 (b)₹29,000 (c)₹25,000 (d)₹75,000
Solution
The first step is to calculate the profit share of each partner based on the profit sharing ratio.
The total ratio is 3+2+1 = 6.
A's share = (3/6) * ₹84,000 = ₹42,000 B's share = (2/6) * ₹84,000 = ₹28,000 C's share = (1/6) * ₹84,000 = ₹14,000
However, B was guaranteed a profit of ₹2,00,000. This means that B's share of the profit is less than the guaranteed amount. The difference of ₹1,72,000 (₹2,00,000 - ₹28,000) will be borne by A and C in their profit sharing ratio of 3:1.
A's share of the deficit = (3/4) * ₹1,72,000 = ₹1,29,000 C's share of the deficit = (1/4) * ₹1,72,000 = ₹43,000
Therefore, the net amount of profit or loss transferred to the capital accounts of A and C are:
A: ₹42,000 (initial share of profit) - ₹1,29,000 (share of deficit) = -₹87,000 (loss) C: ₹14,000 (initial share of profit) - ₹43,000 (share of deficit) = -₹29,000 (loss)
So, the answer is (a)₹87,000 and (b)₹29,000.
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