Question

# Pranshu and Himanshu are partners sharing profits and losses in the ratio of 3 :2 respectively. They admit Arishu as partner with 1/6th share in the profits of the firm. Pranshu personally guaranteed that Anshu's share of Profit would not be less than Rs. 30,000 in any year. The net profit of the firm for the year ending 31st March, 2013 was Rs. 90,000. Prepare Profit and Loss Appropriation Account

Solution

## Calculation of New Profit RatioLet total share= 1Share of profit of incoming partner= 1/6Remaining share= 1-1/6 =5/6Pranshu's new share= 5/6*3/5= 15/30Himanshu's new share=5/6*2/5= 10/30Anshu's share= 5/30New profit sharing ratio= 15:10:5                                        = 3:2:1The deficiency of 15,000 will be compensated by Pranshu and Himanshu in the ratio 3:2.     PROFIT AND LOSS APPROPRIATION ACCOUNT FOR THE YEAR 2018 Particulars Amount Particulars Amount To Profit transferred to-Pranshu's capital A/c - 45,000Less:deficiency         -(9000)Himanshu's capital A/c - 30,000Less:deficiency            -(6000)Anshu's capital A/c - 15,000Add:share                  15,000 90,000 By Net profit 90,000Total  90,000 Total 90,000Accountancy

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