Q Mahesh and Dinesh share profits and losses in the ratio 2:1 From January 01, 2014 they admit - Accountancy - Accounting for Partnership Basic Concepts

Question

Q Mahesh and Dinesh share profits and losses in the ratio 2:1 From
January 01, 2014 they admit Rakesh into their firm whoc is to be
given a share of 1/10 of the profit with a guranteed minimum of Rs
25,000 Mahesh and Dinesh continue to share profits as before but
agree to bear as deficiency on account of gurantee to Rakesh in the
ratio 3:2 respectively The profits of the firm for the year ending
December 31, 2015 amounted to Rs 1,20,000 Prepare Profit and Loss
Appropriation Account

Nitin Verma · Accepted Answer

Dear Student,

Profit and Loss Appropriation
Account
for the year ended
…

Dr

Cr

Particulars
Amount
Rs
Particulars
Amount
Rs

Profit transferred to:

Profit and Loss A/c
1,20,000

Mahesh’s Capital A/c
(72,000-7,800)
64,200

Dinesh’s Capital A/c
(36,000-5,200)
30,800

Rakesh’s Capital A/c
(12,000+13,000)
25,000
1,20,000

1,20,000

Note:

Share of Rakesh in profit = 1,20,000×110 = Rs 12,000 but he is to be given Rs 25,000 and such difference of Rs 13,000 should be contributed by Mahesh and Dinesh in the ratio of 3:2
Regards

Profit and Loss Appropriation Account for the year ended …
Dr.				Cr.
Particulars		Amount Rs	Particulars	Amount Rs

Profit transferred to:			Profit and Loss A/c	1,20,000
Mahesh’s Capital A/c (72,000-7,800)	64,200
Dinesh’s Capital A/c (36,000-5,200)	30,800
Rakesh’s Capital A/c (12,000+13,000)	25,000	1,20,000
		1,20,000		1,20,000