# Radha, Mary and Fatima Are Partners Sharing Profits in the Ratio of 5:4:1. - Accountancy

Journal Entry

Radha, Mary and Fatima are partners sharing profits in the ratio of 5:4:1. Fatima is given a guarantee that her share of profit, in any year will not be less than Rs 5,000. The profits for the year ending March 31, 2017 amounts to Rs 35,000. Shortfall if any, in the profits guaranteed to Fatima is to be borne by Radha and Mary in the ratio of 3:2. Record necessary journal entry to show distribution of profit among partner.

#### Solution

Profit and Loss Appropriation Account

Dr.                                                                                 Cr.

 Particulars Amount Rs Particulars Amount Rs Profit transferred to Profit and Loss 35,000 Radha’s Capital 17,500 16,600 Less: Fatima’s Deficiency {1,500 × (3/5)} (900) Mary’s Capital 14,000 13,400 Less: Fatima’s Deficiency {1,500 × (2/5)} (600) Fatima’s Capital 3,500 5,000 Add: Deficiency born by Radha 900 Mary 600 35,000 35,000

Journal

 Date Particulars L.F. DebitAmount Rs Credit Amount Rs Profit and Loss Appropriation A/c              Dr.  To Radha’s Capital A/c  To Mary’s Capital A/c  To Fatima’s Capital A/c(Profit distributed among Partners) 35000 16600 13400 5000

Alternative Method

Journal

 Date Particulars L.F. Debit Amount Rs Credit Amount Rs Profit and Loss Appropriation A/c                  Dr To Radha’s Capital A/c To Mary’s Capital A/c To Fatima’s Capital A/c(Profit distributed among Partners) 35000 17500 14000 3500 Radha’s Capital A/c                   Dr.Mary’s Capital A/c                   Dr.    To Fatima’s Capital A/c(Deficiency of Fatima’s Share taken from Radha and Mary) 900 600 1500
Concept: Guarantee of Profits to a Partner
Is there an error in this question or solution?

#### APPEARS IN

NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
Chapter 2 Accounting for Partnership : Basic Concepts
Numerical Questions | Q 30 | Page 105