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.
In which ratio the deficiency of T will be borne by A & V?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 2:3
When a partner is guaranteed a minimum profit, the deficiency is borne by the other partners in the ratio the partnership deed fixes; only where the deed is silent is it borne in their profit sharing ratio. Here clause (iii) of the deed says the deficiency is to be borne by A and V in the ratio of 2:3.
So T’s deficiency of Rs. 30,000 is shared:
A = Rs. 30,000 × 2/5 = Rs. 12,000
V = Rs. 30,000 × 3/5 = Rs. 18,000
The tempting figure is 5:3, A and V’s own profit sharing ratio; it would apply only if the deed did not specify a ratio.
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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