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A, B and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.?
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A, B and C are partners in a firm sharing profits and losses in the ra...
**Profit and Loss Appropriation Account**
1. **Calculation of C's guaranteed minimum amount:**
- Ratio of profit sharing: A:B:C = 5:4:1.
- Total guaranteed minimum amount for C = Rs. 24,000.
- Let the total profit be x.
- C's share of profit = (1/10) * x.
- C's guaranteed minimum amount = Rs. 24,000.
Therefore, (1/10) * x = Rs. 24,000.
Solving for x, we get x = Rs. 2,40,000.
2. **Calculation of C's actual share of profit:**
- C's share of profit = (1/10) * x = (1/10) * 2,40,000 = Rs. 24,000.
Since C's guaranteed minimum amount is equal to his actual share of profit, there is no excess profit to be shared between A and B.
3. **Calculation of profit share for A and B:**
- Total profit = Rs. 2,00,000.
- C's actual share of profit = Rs. 24,000.
- Excess profit = Total profit - C's actual share of profit = Rs. 2,00,000 - Rs. 24,000 = Rs. 1,76,000.
Ratio of sharing the excess profit between A and B = 4:1.
- A's share of excess profit = (4/5) * Rs. 1,76,000 = Rs. 1,40,800.
- B's share of excess profit = (1/5) * Rs. 1,76,000 = Rs. 35,200.
4. **Preparation of Profit and Loss Appropriation Account:**
| Particulars | Amount (Rs.) |
|-----------------------------------|--------------|
| Profit and Loss Appropriation | |
| Account for the year ending | |
| | |
| Total profit (To Balance C/D) | 2,00,000 |
| | |
| Less: C's guaranteed minimum | 24,000 |
| (C's share of profit) | |
| | |
| Excess profit to be shared between| |
| A and B | |
| A's share (4/5 of Rs. 1,76,000) | 1,40,800 |
| B's share (1/5 of Rs. 1,76,000) | 35,200 |
| | |
| Balance carried down (C's share | 24,000 |
| of profit) | |
| | |
| Total | 2,00,000 |
| | |
The Profit and Loss Appropriation Account shows the distribution of profits among the partners. It starts with the total profit of Rs. 2,00,000. From this, C's guaranteed minimum amount of Rs. 24,000 is deducted. The remaining profit of Rs. 1,76,000 is shared between A
1. **Calculation of C's guaranteed minimum amount:**
- Ratio of profit sharing: A:B:C = 5:4:1.
- Total guaranteed minimum amount for C = Rs. 24,000.
- Let the total profit be x.
- C's share of profit = (1/10) * x.
- C's guaranteed minimum amount = Rs. 24,000.
Therefore, (1/10) * x = Rs. 24,000.
Solving for x, we get x = Rs. 2,40,000.
2. **Calculation of C's actual share of profit:**
- C's share of profit = (1/10) * x = (1/10) * 2,40,000 = Rs. 24,000.
Since C's guaranteed minimum amount is equal to his actual share of profit, there is no excess profit to be shared between A and B.
3. **Calculation of profit share for A and B:**
- Total profit = Rs. 2,00,000.
- C's actual share of profit = Rs. 24,000.
- Excess profit = Total profit - C's actual share of profit = Rs. 2,00,000 - Rs. 24,000 = Rs. 1,76,000.
Ratio of sharing the excess profit between A and B = 4:1.
- A's share of excess profit = (4/5) * Rs. 1,76,000 = Rs. 1,40,800.
- B's share of excess profit = (1/5) * Rs. 1,76,000 = Rs. 35,200.
4. **Preparation of Profit and Loss Appropriation Account:**
| Particulars | Amount (Rs.) |
|-----------------------------------|--------------|
| Profit and Loss Appropriation | |
| Account for the year ending | |
| | |
| Total profit (To Balance C/D) | 2,00,000 |
| | |
| Less: C's guaranteed minimum | 24,000 |
| (C's share of profit) | |
| | |
| Excess profit to be shared between| |
| A and B | |
| A's share (4/5 of Rs. 1,76,000) | 1,40,800 |
| B's share (1/5 of Rs. 1,76,000) | 35,200 |
| | |
| Balance carried down (C's share | 24,000 |
| of profit) | |
| | |
| Total | 2,00,000 |
| | |
The Profit and Loss Appropriation Account shows the distribution of profits among the partners. It starts with the total profit of Rs. 2,00,000. From this, C's guaranteed minimum amount of Rs. 24,000 is deducted. The remaining profit of Rs. 1,76,000 is shared between A
Community Answer
A, B and C are partners in a firm sharing profits and losses in the ra...
A's Capital A/c Dr. 3200
B's Capital A/c Dr. 800
to C's Capital A/c Dr. 4000
this is the entry which we will post in p & l appro account
B's Capital A/c Dr. 800
to C's Capital A/c Dr. 4000
this is the entry which we will post in p & l appro account
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A, B and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.?
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A, B and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.? 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 and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.?.
A, B and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.? 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 and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B and C are partners in a firm sharing profits and losses in the ratio of 5:4:1 with the condition that C will get a guaranteed minimum of Rs. 24 000 and A and B will bear any excess over 1/10th going to C in the ratio of 4:1 respectively. The profits of the firm in respect of the year are Rs. 2 00 000. Prepare Profit and Loss Appropriation account.?.
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