Ram, Mohan and Sohan are Partners With Capitals of Rs 5,00,000, Rs 2,50,000 and 2,00,000 Respectively

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Ram, Mohan and Sohan are partners with capitals of Rs 5,00,000, Rs 2,50,000 and 2,00,000 respectively.After providing interest on capital @ 10% p.a. the profits are divisible as follows:

Ram 1/2 , Mohan 1/3 Sohan 1/6 . But Ram and Mohan have guaranteed that Sohan’s share in the profit shall not be less than Rs 25,000, in any year. The net profit for the year ended March 31, 2017 is Rs 2,00,000, before charging interest on capital.

You are required to show distribution of profit.




Profit and Loss Appropriation A/c 
as on 31 March 2017

Particulars AmountParticulars Amount
To Interest on Capital By Profit and Loss A/c2,00,000
Ram50,000
Mohan25,000
Sohan20,00095,000
To Profit Transferred to 
Ram’s Capital52,500
Less: Share of deficiency {7,500 × (3/5)}(4,500)  48,000
To Mohan’s Capital35,000
Less: Share of deficiency {7,500 × (2/5)}(3,000)  32,000
To Sohan’s Capital17,500
Add: Deficiency received from  
Ram4,500
Mohan3,000      25,000
 2,00,0002,00,000

Chapter-2 Partnership Basic: Accounts



Location: India

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