Accountancy Part AAccounting for Partnership

Kavita and Lalita are partners, sharing profits in the ratio of 2:1.…

Kavita and Lalita are partners, sharing profits in the ratio of 2:1. They decide to admit Mohan for 1/4th share in future profits with a guaranteed amount of ₹25,000. Both Kavita and Lalita undertake to meet the liability arising due to the guaranteed amount to Mohan in their respective profit-sharing ratio. The firm earned profits of ₹76,000 for the year 2022-23. The deficiency borne by Kavita is:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → ₹4,000

Mohan is guaranteed ₹25,000. If his share of profit falls short, Kavita and Lalita make up the shortfall in their own ratio, 2:1.

Mohan’s share of profit = ₹76,000 × 1/4
= ₹19,000

Deficiency = ₹25,000 − ₹19,000
= ₹6,000

Borne by Kavita = ₹6,000 × 2/3
= ₹4,000

Borne by Lalita = ₹6,000 × 1/3
= ₹2,000

₹6,000 is the whole deficiency, and ₹2,000 is Lalita’s part of it.

NCERT (2026-27 edition):
Do It Yourself

Extract from the NCERT textbook

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. The minimum guaranteed amount shall be paid to such new partner when his share of profit as per the profit sharing ratio is less than the guarnteed amount.”