Question

Annu, Banu and Chanu are partners, Chanu has been given a guarantee of minimum profit of ₹ 8,000 by the firm. Firm suffered a loss of ₹ 5,000 during the year. Capital account of Banu will be ______ by ₹ ______.

Options

• Credited, ₹ 6,500.

• Debited, ₹ 6,500.

• Credited, ₹ 1,500. 

• Debited, ₹ 1,500.

Answer 1

Annu, Banu and Chanu are partners, Chanu has been given a guarantee of minimum profit of ₹ 8,000 by the firm. Firm suffered a loss of ₹ 5,000 during the year. Capital account of Banu will be debited by ₹ 6,500.

Explanation:

The firm has suffered a loss of ₹ 5,000.

Chanu is guaranteed a profit of ₹ 8,000.

Total amount to be borne by the other partners = Loss + Guaranteed profit

= ₹ 5,000 + ₹ 8,000

= ₹ 13,000

Since the profit-sharing ratio between Annu and Banu is not specified, it is assumed that they share profits equally.

Share of Banu = `(13,000)/2`

= ₹ 6,500

Therefore, Banu’s capital account will be debited by ₹ 6,500.