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

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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.




ParticularsAmount (Rs.)ParticularsAmount (Rs.)
Profit transferred to partners capital A/CBy net profit40,000
Ram20,000
   less: give to george1,25018,750
Raju12,000
   less: give to george75011,250
George8,000
   Add: received from Ram1,250
   Add: received from Raju75010,000
40,00040,000

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




Location: India

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