Question

Q No. 7
Q. 7. P and Q were partners in a firm sharing profits in the ratio 5:3. On 1^st April, 2016 they admitted R as a new partner for 1/8^th share in the profits with a guaranteed profit of Rs. 75,000. The new profit sharing ratio between P and Q will remain the same but they agreed to bear any deficiencies on account of guarantee to R in the ratio 3:2. The profit of the firm for the year ended 31^st March, 2017 was Rs. 4,00,000.
Prepare Profit and Loss Appropriation Account of P, Q and R for the year ended 31^st March, 2017.

Answer 1

Dear Student,

Profit & Loss Appropriation A/c
Date	Particulars	Amount (in Rs)	Date	Particulars	Amount (in Rs)
	Profit transferred to partners' Capital A/c		31 Mar 2017	Net Profit A/c	400,000
	-- P's Capital A/c (4,00,000*35/64) - 15,000	203,750
	-- Q's Capital A/c (4,00,000*21/64) - 10,000	121,250
	-- R's Capital A/c (4,00,000*1/8) +25,000	75,000
		400,000			400,000

Total profit was Rs 4,00,000
New partner R's share is one-eight which comes to Rs 50,000; but he is guaranteed with Rs 75,000 to be provided by P & Q in 3:2;
so excess of Rs 25,00 would be provided by P & Q as Rs 15,000 and Rs 10,000 respectively;

New share of P , Q & R is 35:21:8;

Regards