$A, B$ and $C$ are partners having capitals of $R s .10, 00, 000; R s . 8, 00, 000$ and $R s .6, 00, 000$ respectively in a firm and sharing profits and losses equally. $C$ is guaranteed a mininimum profit of $R s . 1, 00, 000$ as share of profit every year. The firm incurred a loss of $R s . 3, 00, 000$ for the year ended 31st March, 2018. You are required to show the necessary accounts for division of loss and giving effect to minimum guaranteed profit to $C$ .

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Solution

PARTNERS CAPITAL ACCOUNT
Particulars A B C Particulars A B C
To profit and loss A/c 1,50,000 1,50,000 NIL By bal b/d 10,00,000 8,00,000 6,00,000
To C's capital 50,000 50,000 By A' capital 50,000
To bal c/d 8,00,000 6,00,000 7,00,000 By B's capital 50,000

Total 10,00,000 8,00,000 7,00,000 Total 10,00,000 8,00,000 7,00,000
Year C's guaranteed profit Actual share Deficiency
2018 1,00,000 (1,00,000) 1,00,000

The C's deficiency of 1,00,000 is to be made good by A and B the ratio of 1:1.
So,each need to contribute 50,000.

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Particulars	A	B	C	Particulars	A	B	C
To profit and loss A/c	1,50,000	1,50,000	NIL	By bal b/d	10,00,000	8,00,000	6,00,000
To C's capital	50,000	50,000		By A' capital			50,000
To bal c/d	8,00,000	6,00,000	7,00,000	By B's capital			50,000

Total	10,00,000	8,00,000	7,00,000	Total	10,00,000	8,00,000	7,00,000