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Question -

Ram, Mohan and Sohan are partners with capitals of ₹ 5, 00,000, ₹ 2, 50,000 and 2, 00,000 respectively. After providing interest on capital @ 10% p.a. the profits are divisible as follows:

Ram 1/2, Mohan 1/3 Sohan 1/6. But Ram and Mohan have guaranteed that Sohan’s share in the profit shall not be less than ₹ 25,000, in any year. The net profit for the year ended March 31, 2017 is ₹ 2, 00,000, before charging interest on capital. You are required to show distribution of profit.



Answer -

Profit and Loss Appropriation A/c as on 31 March 2017

 

Dr.

 

 

 

Cr.

 

Particulars

 

Amount

Particulars

Amount

Interest on Capital

 

 

Profit and Loss

2,00,000

Ram

50,000

 

 

 

Mohan

25,000

 

 

 

Sohan

20,000

95,000

 

 

 

 

 

 

 

Profit Transferred to

 

 

 

 

Ram’s Capital

52,500

 

 

 

Less: Share of deficiency {7,500 × (3/5)}

(4,500)

48,000

 

 

 

 

 

 

 

Mohan’s Capital

35,000

 

 

 

Less: Share of deficiency {7,500 × (2/5)}

(3,000)

32,000

 

 

 

 

 

 

 

Sohan’s Capital

17,500

 

 

 

Add: Deficiency received from

 

 

 

 

Ram

4,500

 

 

 

Mohan

3,000

25,000

 

 

 

 

 

 

 

 

 

 

2,00,000

 

2,00,000

 

 

 

 

 

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