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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. - CBSE (Arts) Class 12 - Accountancy

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Question

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`

  Is there an error in this question or solution?

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Solution 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. Concept: Preparation of Profit and Loss Appropriation Account.
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