A, B C were partners in a firm sharing profits in the ratio of 3:2:1 B was - Accountancy - Accounting for Partnership Basic Concepts

Question

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?????

Neha Chopra · Accepted Answer

Dear Student

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)

Profit Share
:

B's Capital
A/c

200,000

Net
profit

84,000

Capital
A/c

A
87000

C
29000
116,000

200,000

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
Date	Particulars	(Rs)	Date	Particulars		(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