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

Answer 1

Calculation of New Profit Ratio

Let total share= 1

Share of profit of incoming partner= 1/6

Remaining share= 1-1/6 =5/6

Pranshu's new share= 5/6*3/5= 15/30

Himanshu's new share=5/6*2/5= 10/30

Anshu's share= 5/30

New profit sharing ratio= 15:10:5

= 3:2:1

The 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 - 45,000 Less:deficiency -(9000) Himanshu's capital A/c - 30,000 Less:deficiency -(6000) Anshu's capital A/c - 15,000 Add:share 15,000	90,000	By Net profit	90,000
Total	90,000	Total	90,000