Read the following passage and answer the questions.
A Solid Partnership
A, V and T were partners of a law firm sharing profits in the ratio of 5:3:2. Their partnership deed provided the following:
(i) Interest on partners' capital @ 5% p.a.
(ii) A guaranteed that he would earn a minimum annual fee of ₹6,00,000 for the firm.
(iii) T was guaranteed a profit of ₹2,50,000 (excluding interest on capital) and any deficiency on account of this was to be borne by A and V in the ratio of 2:3.
During the year ending March 31, 2019, A earned a fee of ₹3,20,000 and net profits earned by the firm were ₹8,60,000.
Partner's capital on April 01, 2018 were A - ₹3,00,000; V - ₹3,00,000 and T- ₹2,00,000.
What is the amount of A's deficiency of annual fee?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹2,80,000.
A guaranteed that he would earn a minimum annual fee of ₹6,00,000 for the firm. A earned a fee of ₹3,20,000.
A's deficiency = 6,00,000 - 3,20,000
= 2,80,000
This deficiency is brought by A i.e. 2,80,000.