Adil, Bhavya, and Chris are partners sharing profits in the ratio of 5:4:1. Chris is given a guarantee that his share of profit in any year will not be less than ₹ 5,000. The deficiency in the profit share of Chris will be borne by Bhavya.
Adil, Bhavya, and Chris are partners sharing profits in the ratio of 5:4:1. Chris is given a guarantee that his share of profit in any year will not be less than ₹ 5,000. The deficiency in the profit share of Chris will be borne by Bhavya. The Journal entry to record for deficiency met by Bhavya is given below:
Bhavya’s Capital A/c Dr. ₹ 1,000
To Chris’s Capital A/c ₹ 1,000
(Deficiency met be Bhavya)
Profit earned during the year was
a) ₹ 30,000
b) ₹ 35,000
d) ₹ 40,000
d) ₹ 50,000
Anurag Pathak Changed status to publish April 9, 2023
Ans – c)
The actual share of Profit received by Chris is ₹ 5000 – ₹ 1000 = ₹ 4000
Thus Profit earned by the firm is
4000 * reciprocal of Chris share
4000 * 10/1
= ₹ 40,000
Anurag Pathak Changed status to publish April 4, 2023
