A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his share of profits in any year will not be less than ₹ 20,000

A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his share of profits in any year will not be less than ₹ 20,000. the profit for the year ending 31st March, 2023 amounts to ₹ 1,40,000. Amount of shortfall in the profits given to C will be borne by A and B in the ratio of 3 : 2. Pass necessary journal entry regarding deficiency borne by A and B.

[Ans.]

A’s Capital A/c Dr. 3,600
B’s Capital A/c Dr. 2,400
To C’s Capital A/c 6,000