A, V and T were partners of a law firm sharing profits in the ratio of 5:3:2. Their partnership deed provided the following:(i) Interest on partners’ - CUET Accountancy MCQ CUET Accountancy 2025 15 May Shift 1 2026 | ExamTest.live

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A, V and T were partners of a law firm sharing profits in the ratio of 5:3:2. Their partnership deed provided the following:(i) Interest on partners’ capital @ 5% p.a.(ii) A guaranteed that he would earn a minimum annual fee of Rs. 6,00,000 for the firm.(iii) T was guaranteed a profit of Rs. 2,50,000 (excluding interest on capital) and any deficiency on account of this was to be borne by A and V in the ratio of 2:3.During the year ending March 31, 2019, A earned a fee of Rs. 3,20,000 and net profits earned by the firm were Rs. 8,60,000. Partner’s capital on April 01, 2018 were A - Rs. 3,00,000; V - Rs. 3,00,000 and T - Rs. 2,00,000.What is the amount of profit to be credited to V's Capital account?

Solution & Step-by-step Explanation

Let's follow the step-by-step profit distribution calculations:The total divisible profit pool is Rs. 11, 00, 000 (calculated as Rs. 8, 60, 000 base profit + Rs. 2, 80, 000 A’s fee deficiency - Rs. 40, 000 total interest on capital).Calculate V's initial profit share: V’s Standard Profit Share = 11, 00, 000 \times \frac{3}{10} = Rs. 3, 30, 000 Calculate V's share of T's guaranteed profit deficit:T's total deficiency is Rs. 30, 000 (Guaranteed Rs. 2, 50, 000 - Actual Share Rs. 2, 20, 000).This deficiency is split between A and V in a 2 : 3 ratio. Deficiency Share borne by V = 30, 000 \times \frac{3}{5} = Rs. 18, 000 Calculate the final profit credited to V's capital account: Final Profit Share for V = Initial Share - Deficiency Contribution Final Profit Share for V = 3, 30, 000 - 18, 000 = Rs. 3, 12, 000

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A, V and T were partners of a law firm sharing profits in the ratio of 5:3:2. Their partnership deed provided the following:(i) Interest on partners’ capital @ 5% p.a.(ii) A guaranteed that he would earn a minimum annual fee of Rs. 6,00,000 for the firm.(iii) T was guaranteed a profit of Rs. 2,50,000 (excluding interest on capital) and any deficiency on account of this was to be borne by A and V in the ratio of 2:3.During the year ending March 31, 2019, A earned a fee of Rs. 3,20,000 and net profits earned by the firm were Rs. 8,60,000. Partner’s capital on April 01, 2018 were A - Rs. 3,00,000; V - Rs. 3,00,000 and T - Rs. 2,00,000.What is the amount of profit to be credited to V's Capital account?

Rs.3,10,000

Rs.3,11,000

Rs.3,12,000

Rs.3,13,000

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