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A B C entered into a partnership on October 1st 2017 to share profits and losses in the ratio of 3:2:1 .A ,however, personally guaranteed that C's share of profit after charging interest on capitals at 5% p.a . Would not be less than rupees 30000 in any year . The capital contributions were A rupees 300000, B rupees 200000, and C rupees 100000. The profit for the period ended 31st march , 2018 were rupees 120000. Show the distributable of profits.?
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A B C entered into a partnership on October 1st 2017 to share profits ...
Solution:

Given data:

- Partnership formed on October 1st, 2017.
- Profit sharing ratio of A, B, and C is 3:2:1.
- A guaranteed C's share of profit after interest on capital @ 5% p.a. would not be less than Rs. 30,000 in any year.
- Capital contributions are A = Rs. 3,00,000, B = Rs. 2,00,000, and C = Rs. 1,00,000.
- Profit for the period ended on 31st March, 2018, is Rs. 1,20,000.

To find:

- The distributable profits to A, B, and C.

Calculation:

Step 1: Calculation of Interest on Capital

A's interest on capital = 5% of Rs. 3,00,000 = Rs. 15,000
B's interest on capital = 5% of Rs. 2,00,000 = Rs. 10,000
C's interest on capital = 5% of Rs. 1,00,000 = Rs. 5,000

Step 2: Calculation of Adjusted Profit

C's share of profit after interest = Rs. 30,000
C's share of interest on capital = Rs. 5,000
Therefore, C's minimum share of profit = Rs. 35,000

Adjusted profit = Total profit - Interest on capital - C's guaranteed profit
Adjusted profit = Rs. 1,20,000 - (Rs. 15,000 + Rs. 10,000 + Rs. 5,000) - Rs. 35,000
Adjusted profit = Rs. 55,000

Step 3: Calculation of Profit Share

A's share of profit = 3/6 x Rs. 55,000 = Rs. 27,500
B's share of profit = 2/6 x Rs. 55,000 = Rs. 18,333.33
C's share of profit = 1/6 x Rs. 55,000 = Rs. 9,166.67

Step 4: Calculation of Total Income

A's total income = A's share of profit + A's interest on capital
A's total income = Rs. 27,500 + Rs. 15,000 = Rs. 42,500

B's total income = B's share of profit + B's interest on capital
B's total income = Rs. 18,333.33 + Rs. 10,000 = Rs. 28,333.33

C's total income = C's share of profit + C's interest on capital
C's total income = Rs. 9,166.67 + Rs. 5,000 = Rs. 14,166.67

Therefore, the distributable profits to A, B, and C are as follows:

- A's share of profit = Rs. 27,500
- A's interest on capital = Rs. 15,000
- A's total income = Rs. 42,500

- B's share of profit = Rs. 18,333.33
- B's interest on capital = Rs. 10,000
- B's total income = Rs. 28,333.
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A B C entered into a partnership on October 1st 2017 to share profits ...
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A B C entered into a partnership on October 1st 2017 to share profits and losses in the ratio of 3:2:1 .A ,however, personally guaranteed that C's share of profit after charging interest on capitals at 5% p.a . Would not be less than rupees 30000 in any year . The capital contributions were A rupees 300000, B rupees 200000, and C rupees 100000. The profit for the period ended 31st march , 2018 were rupees 120000. Show the distributable of profits.?
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A B C entered into a partnership on October 1st 2017 to share profits and losses in the ratio of 3:2:1 .A ,however, personally guaranteed that C's share of profit after charging interest on capitals at 5% p.a . Would not be less than rupees 30000 in any year . The capital contributions were A rupees 300000, B rupees 200000, and C rupees 100000. The profit for the period ended 31st march , 2018 were rupees 120000. Show the distributable of profits.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A B C entered into a partnership on October 1st 2017 to share profits and losses in the ratio of 3:2:1 .A ,however, personally guaranteed that C's share of profit after charging interest on capitals at 5% p.a . Would not be less than rupees 30000 in any year . The capital contributions were A rupees 300000, B rupees 200000, and C rupees 100000. The profit for the period ended 31st march , 2018 were rupees 120000. Show the distributable of profits.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A B C entered into a partnership on October 1st 2017 to share profits and losses in the ratio of 3:2:1 .A ,however, personally guaranteed that C's share of profit after charging interest on capitals at 5% p.a . Would not be less than rupees 30000 in any year . The capital contributions were A rupees 300000, B rupees 200000, and C rupees 100000. The profit for the period ended 31st march , 2018 were rupees 120000. Show the distributable of profits.?.
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