Question

A, B and C were in partnership sharing profits and losses in the ratio of 4 : 2 : 1 respectively. It was provided that C’s share in profit for a year would not be less then Rs. 7,500. The profit for the year ended 31st March, 2018 amounted to Rs. 31,500. You are required to show the appropriation among the partners. The profit and Loss Appropriation Account is not required.

Answer 1

C'S Actual profit share (i.e Rs. 4,500) is less than his Minimum Guaranteed profit (i.e 7,500)