Accountancy Part AAdmission of a Partner

A and B share profits in the ratio of 3 : 4. They admitted C for 1/5t…

A and B share profits in the ratio of 3 : 4. They admitted C for 1/5th share in future profits with a guarantee that his share of profits shall be at least ₹30,000.

In the above case, any deficiency to C will be borne by A and B in the ratio of :

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → 3 : 4

When the old partners together guarantee a minimum profit to a new partner and nothing else is agreed, any deficiency is borne by them in their own profit sharing ratio – here A and B share 3 : 4.

Option (1) 1 : 1 — Incorrect. Equal sharing applies only if the partners agree so.

Option (3) 4 : 3 — Incorrect. This reverses A’s and B’s shares.

Option (4) 4 : 1 — Incorrect. It has no basis in the facts given.

NCERT (2026-27 edition):
Guarantee of Profit to a Partner – “Sometimes a partner is admitted into the firm with a guarantee of certain minimum amount by way of his share of profits of the firm. Such assurance may be given by all the old partners in a certain ratio or by any of the old partners, individually to the new partner.”

NCERT (2026-27 edition):
Guarantee of Profit to a Partner – “… The share of Kanishka works out to be Rs.5,000 short of the guaranteed amount. This shall be borne by the guaranteeing partners Madhulika and Rakshita in their profit sharing ratio, which in this case is 2:3, Madhulika’s share in the deficiency comes to Rs.2,000 (2/5 of Rs. 5,000), and that of Rakshita Rs.3,000.”