Practicing Success
Amit, Babu and Charu set up a partnership firm on April 1, 2019. They contributed Rs. 50,000, Rs. 40,000 and Rs. 30,000, respectively as their capitals and agreed to share profits and losses in the ratio of 3: 2 :1. Charu is guaranteed profit of ₹15,000 per year. If any deficiency is there, it will be borne by both partners in 5:4. Firm earned a profit of ₹1,20,000. How much deficiency is borne by each partner? |
Amit- ₹1,000, Babu- ₹800 Amit- ₹2,000, Babu-₹1,600 Amit- ₹800, Babu-₹1,000 No deficiency is borne by partners |
No deficiency is borne by partners |
The correct answer is option 4- No deficiency is borne by partners. The minimum guaranteed amount shall be paid to such partner when his share of profit as per the profit-sharing ratio is less than the guaranteed amount. Amit share = 1,20,000 x 3/6 As Charu is getting more than guaranteed profit, so there will be no deficiency. |