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**A, B & C were partners in a firm sharing profits in the ratio of 3:2:1. B was guaranteed a**

profit of Rs. 2,00,000. During the year, the firm earned a profit of Rs. 84,000. Calculate the

net amount of Profit/Loss transferred to capital accounts of A & C.

** ***Can someone please explain me how to do this sum?????*

profit of Rs. 2,00,000. During the year, the firm earned a profit of Rs. 84,000. Calculate the

net amount of Profit/Loss transferred to capital accounts of A & C.

*Can someone please explain me how to do this sum?????*

As no info regarding the ratio of Deficiency borne is given, Assuming that guarantee given to B is given by A and C in their PSR i.e 3: 1.

Steps to solve this problem :

1. Find the share of profit through their Actual PSR.

2. Find the deficiency of profit by comparing actual profit share of B by Rs 2,00,000/-. This deficiency shall be borne by A and C in the ratio of 2:1.

3. From the actual profits arrived of A and C Subtract the deficiency share and the remaining would be the Actual share of A and C.

4. Please refer the solution below to understand correctly.

Solution :

Calculation of Actual distribution of profit | ||

Total Profit | 84,000 | |

Share of Profit in PSR : | ||

A : | (84,000 x 3/6) | 42,000 |

B : | (84,000 x 2/6) | 28,000 |

C : | (84,000 x 1/6) | 14,000 |

Share Guaranteed to B by A and C in Ratio 3:1 | 200,000 | |

Deficiency | (2,00,000 - 28,000) | 172,000 |

Deficiency to be borne by A | (1,72,000 x 3/4) | 129,000 |

Net profit transferred to A's Capital A/c | (42,000 - 1,29,000) | (87,000) |

Deficiency to be borne by C | (1,72,000 x 1/4) | 43,000 |

Net profit transferred to A's Capital A/c | (14,000 - 43,000) | (29,000) |

Profit and Loss Appropriation A/c | |||||||

Date | Particulars | Amount | Date | Particulars | Amount | ||

(Rs) | (Rs) | ||||||

Profit Share : | |||||||

B's Capital A/c | 200,000 | Net profit | 84,000 | ||||

Capital A/c | |||||||

A | 87000 | ||||||

C | 29000 | 116,000 | |||||

200,000 | 200,000 |

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