The Total solution for NCERT class 6-12
Amit, Babita and Sona form a partnership firm,sharing profits in the ratio of 3 : 2 : 1, subject to the following :
(i)
Sona’s share in the profits, guaranteed to be not less than ₹ 15,000 in any year.
(ii)
Babita gives guarantee to the effect that gross fee earned by her for the firm shall be equal to her average gross fee of the proceeding five years, when she was carrying on profession alone (which is ₹ 25,000). The net profit for the year ended March 31, 2017 is ₹ 75,000. The gross fee earned by Babita for the firm was ₹ 16,000.
You are required to show Profit and LossAppropriation Account (after giving effect to the alone).
Profit and Loss Appropriation Account as on March 31, 2017
Dr.
Cr.
Particulars
Amount
₹
Profit Transferred to
Profit and Loss
75,000
Amit’s Capital {84,000 × (3/6)}
42,000
Babita’s Capital
9,000
Less: Sona’s share of deficiency {1,000 × (3/5)}
(600)
41,400
(Deficiency of Fees 25,000 – 16,000)
Babita’s Capital {84,000 × (2/6)}
28,000
Less: Sona’s share of deficiency {1,000 × (2/5)}
(400)
27,600
Sona’s Capital {84,000 × (1/6)}
14,000
Add: Deficiency received from
Amit
600
Babita
400
15,000
84,000