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) → Rs. 2,80,000
A guaranteed that he would earn a minimum annual fee for the firm. Whatever he falls short of that figure, he must make good to the firm, and the amount is credited to the Profit and Loss Appropriation Account (debited to A’s capital).
Guaranteed fee = Rs. 6,00,000
Fee actually earned = Rs. 3,20,000
Deficiency = Rs. 6,00,000 − Rs. 3,20,000 = Rs. 2,80,000
Note: The book’s own question prints Arun’s capital as Rs. 30,00,000; its solution charges him interest of Rs. 15,000, which is 5% of Rs. 3,00,000, so the book’s Rs. 30,00,000 is a misprint. The NTA passage has the correct Rs. 3,00,000.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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