Usha and Uma were partners in a firm sharing profits in the ratio of 3:2. On 1-4-2014 they admitted Urmila as a new partner with 1/5th share in the profits with a guaranteed profit of Rs 30,000. The new profit sharing ratio between Usha and Uma will remain the same but they agreed to bear any deficiency on account of guarantee to Urmila in the ratio of 7:3. The profit of the firm for the year ended 31-3-2015 was Rs 1, 35,000.
Prepare Profit and Loss Appropriation Account of Usha, Uma and Urmila for the year ended 31-3-2015.
Solution
Profit and Loss Appropriation Account
for the year ended March 31,2015
Dr Cr
| Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
To Profit transferred to : Usha’s Capital A/c 63,000 Uma’s Capital A/c 42,000 Urmila’s Capital A/c 30,000 |
1,35,000 |
By Profit and Loss A/c
|
1,35,000
|
|
1,35,000 |
1,35,000 |
Working Notes :
Urmila's Share in Profit `=135000xx1/5=27000`
Minimum Guranteed Profit to Urmila = 30,000
Deficiency = 3,000 (30,000 - 27,000)
Deficiency to be borne by E and F in the ratio of 7:3
Amount to be borne by Usha `=3000xx7/10=21000`
Amount to be borne by Uma `=3000xx3/10=900`
Remaining Profit to be distributed between Usha and Uma in the ratio of 3:2
∴ Usha's Profit Share =`105000xx3/5=63000`
& Uma's Profit Share = `105000xx2/5=42000`
