Vijay and Manohar share profits and losses in the ratio of 2 : 1. They admit Prakash as a partner with 1/4 share in profits with a guarantee that his share of profit will be at least Rs. 50,000. The net profit of the firm for the year ending March 31, 2015, was Rs. 1,60,000. Calculate the amount of profit Vijay will get:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 73,333
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New profit-sharing ratio (remaining 3/4 in old 2:1): Vijay = 1/2, Manohar = 1/4, Prakash = 1/4.
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Distribute ₹1,60,000: Vijay ₹80,000; Manohar ₹40,000; Prakash ₹40,000.
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Guarantee to Prakash = ₹50,000 ⇒ shortfall = ₹10,000.
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Deficiency borne by Vijay & Manohar in sacrificing ratio 2:1 ⇒ Vijay bears ₹10,000 × 2/3 = ₹6,666.67.
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Vijay’s final share = ₹80,000 − ₹6,666.67 ≈ ₹73,333.