A, B and C are partners sharing profits in the ratio of 5:2:3. They admitted D in the firm for 1/5 share on Oct. 1st, 2022 with a guarantee of profit ₹35,000 annually. The firm earned a profit of ₹1,60,000 for the year ending March 31st 2023. Calculate deficiency borne by B.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹300
D joined on 1 October, so he shares profit for 6 months only, and the annual guarantee is reduced in the same way. Any deficiency is met by the old partners in their old ratio 5 : 2 : 3.
Profit for 6 months = 1,60,000 × 6/12 = ₹80,000
D’s share = 80,000 × 1/5 = ₹16,000
Guarantee for 6 months = 35,000 × 6/12 = ₹17,500
Deficiency = 17,500 − 16,000 = ₹1,500
Borne by B = 1,500 × 2/10 = ₹300