Ram, Raj and George are Partners Sharing Profits in the Ratio 5 :3:2 According to the Partnership Agreement George

Ram, Raj and George are partners sharing profits in the ratio 5 : 3 : 2. According to the partnership agreement George is to get a minimum amount of Rs 10,000 as his share of profits every year. The net profit for the year 2013 amounted to Rs 40,000. Prepare the Profit and Loss Appropriation Account.

Particulars		Amount (Rs.)	Particulars	Amount (Rs.)
Profit transferred to partners capital A/C			By net profit	40,000
Ram	20,000
less: give to george	1,250	18,750
Raju	12,000
less: give to george	750	11,250
George	8,000
Add: received from Ram	1,250
Add: received from Raju	750	10,000
	40,000			40,000

Working notes

George = Rs. 40,000 X `2/10`

= Rs. 20,000

Guaranteed profit=10,000

Deficincy = Rs. (10,000-8,000)

= Rs. 2,000

Ram’s contribution= Rs. `5/8` X 2,000 =Rs. 1,250

Raj’s contribution= Rs. `3/8` X 2,000 =Rs. 750

Chapter-2 Partnership Basic: Accounts

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