Question 46 of 50intermediate🔧 ApplyNumerical4 marks

Amit, Sumit and Samiksha are in partnership sharing profits in the ratio of 3:2:1. Samiksha’ share in profit has been guaranteed by Amit and Sumit to be a minimum sum of Rs. 8,000. Profits for the year ended March 31, 2017 was Rs. 36,000. Divide profit among the partners by preparing profit and loss appropriation account.

Correct Answer

Profit and Loss Appropriation Account

Dr. Side:

  • Profit transferred to Amit: Rs. 16,800
  • Profit transferred to Sumit: Rs. 11,200
  • Profit transferred to Samiksha: Rs. 8,000
  • Total: Rs. 36,000

Cr. Side:

  • Profit for the year: Rs. 36,000

Final shares: Amit Rs. 16,800; Sumit Rs. 11,200; Samiksha Rs. 8,000

Exercise: Numerical Questions | Q: 28 | (Page 43)
For More Understanding

Explanation

This question involves guarantee of minimum profit share. When a partner's share falls below the guaranteed amount, the deficiency is borne by the guaranteeing partners in their profit sharing ratio. Here, Samiksha's actual share (Rs. 6,000) is less than the guaranteed amount (Rs. 8,000), so the deficiency of Rs. 2,000 is borne by Amit and Sumit in their ratio of 3:2.

Solution Steps

  1. Step 1: Calculate profit share as per ratio 3:2:1. Total profit Rs. 36,000. Amit's share = 36,000×3000 \times 3/6 = Rs. 18,000; Sumit's share = 36,000×2000 \times 2/6 = Rs. 12,000; Samiksha's share = 36,000×1000 \times 1/6 = Rs. 6,000.

  2. Step 2: Identify deficiency. Samiksha's guaranteed minimum = Rs. 8,000. Actual share = Rs. 6,000. Deficiency = Rs. 8,000 - Rs. 6,000 = Rs. 2,000.

  3. Step 3: Distribute deficiency between Amit and Sumit in their profit sharing ratio 3:2. Amit bears = 2,000×3000 \times 3/5 = Rs. 1,200. Sumit bears = 2,000×2000 \times 2/5 = Rs. 800.

  4. Step 4: Calculate final shares. Amit = 18,000 - 1,200 = Rs. 16,800. Sumit = 12,000 - 800 = Rs. 11,200. Samiksha = Rs. 8,000 (guaranteed amount).

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