Profit Distribution

The direct answer is A: no deficiency will be recognized. A guarantee promises a minimum amount, not an additional amount above the partner’s normal entitlement. First calculate the partner’s normal share under the ordinary profit-sharing arrangement. If that normal share is already greater than the guaranteed amount, the partner has automatically received more than the minimum guarantee. Therefore there is no shortfall and no deficiency to be borne by another partner. Option A is correct. Option B is wrong because the whole guarantee is not treated as deficiency; the guarantee is only a minimum. Option C is wrong because the normal share is not itself a deficiency. Option D is wrong because no deficiency exists to be transferred to loss. For example, if the guarantee is Rs 20,000 but the normal share is Rs 25,000, the partner receives Rs 25,000 and the deficiency is zero. Remember: deficiency equals guaranteed amount minus normal share only when the result is positive.

First deduct the salary: remaining profit = ₹270,000 − ₹45,000 = ₹225,000. With ratio 2:5:3 total parts = 10. A's share = (2/10) × ₹225,000 = ₹45,000, so option A is correct. Why other options are wrong: B (₹54,000) is what you would get if you ignored the salary and used 2/10 of ₹270,000; C (₹60,000) arises from using an incorrect denominator (not the correct total parts); D (₹225,000) is the remaining profit after salary, not A's individual share. Exam tip: always subtract partner salaries/guarantees from total profit first, then divide the remainder by the agreed profit ratio.

As three fifth share in remaining profit is Rs 72000. Adding salary and commission gives total claim Rs 112000.

By sequential appropriation, deduct A's salary first: 230000 − 30000 = 200000. B's commission is 15% of the remaining profit: 0.15 × 200000 = Rs 30000. Option B (Rs 34500) reflects the common mistake of taking 15% of the total profit (0.15 × 230000), which is incorrect because the salary must be deducted before computing commission. Exam tip: write each appropriation step clearly and apply percentage rates only to the specified base (remaining profit).

Profit after salary is Rs 200000. Commission is (200000 \times \frac{15}{115}) which is about Rs 26087.

After salary and commission remaining profit is Rs 280000. Third partners three twelfth share is Rs 70000.

Interest on drawings is a recovery from the partner and represents income of the firm, so it is shown on the credit side of the appropriation account. Even if the year results in a loss, provisions in the deed are applied and such income is credited. Option D is wrong because interest on capital is an expense paid to partners (a debit item), which is the opposite of interest on drawings. Exam tip: Always follow the deed — treat interest on drawings as income (credit) irrespective of a profit or loss position.

Interest on drawings is a credit for the firm and reduces loss. Therefore distributable loss will be Rs 42000.

Due to special deed clause interest is treated like expense. Loss becomes Rs 30000 plus Rs 20000 equal to Rs 50000.

After salary remaining profit is Rs 120000. Cs normal share is Rs 40000 so deficiency is Rs 20000.

Total claim is Rs 70000 and As share is three fifths. Three fifths of available profit is Rs 33600.

Compute remaining profit first: ₹260000 + ₹18000 − ₹98000 = ₹180000. Total ratio = 3+2+2 = 7. Second partner's share = (2/7) × ₹180000 = ₹360000/7 ≈ ₹51428.57, rounded ≈ ₹51429. Option A matches this. Closest distractor B is incorrect because it does not correspond to any correct fractional share of the remaining profit; some students mistakenly use a wrong denominator or add instead of subtracting debit items. Exam tip: always adjust net profit with credit and debit items in the appropriation account before applying the profit-sharing ratio.

Excess credit may mean profit is still to be distributed. In final profit distribution appropriation account is debited.

Under old ratio B got Rs 60000. Under new ratio B should get Rs 80000 so B is credited by Rs 20000.

A was overpaid by Rs 72,000 − Rs 64,000 = Rs 8,000. To correct this excess, A's current/capital account is debited (reducing his balance) in the adjustment entry to recover the amount. Option B is wrong because crediting A would increase his balance, which is the opposite of the required correction. Exam tip: If a partner is overpaid, debit that partner's account; if underpaid, credit it.

In such questions changing order changes the answer. Matching available profit and final partner claim at each step is safest.

Interest on drawings is added and other appropriation items are deducted from net profit. Rs 420000 plus Rs 18000 minus Rs 204000 equals Rs 234000.

Profit after salary is Rs 336000. Commission by (336000 \times \frac{15}{115}) is about Rs 43826.

Cs normal share is Rs 75000 so deficiency is Rs 15000. As normal share was Rs 125000 and after bearing deficiency it becomes Rs 110000.

A and B share between themselves in the ratio 7 : 5, so their combined parts = 7 + 5 = 12. B's share of the deficiency = (5/12) × 21,000 = 5 × 1,750 = Rs 8,750. A common wrong choice (Rs 10,500) equals half of Rs 21,000 and would be chosen if one mistakenly assumed A and B share equally. Exam tip: when only some partners bear a loss/deficiency, work with the reduced ratio of those partners only (here 7:5).

Total claim is Rs 120000 and Bs share is two fifths. Two fifths of available profit is Rs 30000.

Commission is Rs 24000 and remaining profit is Rs 300000. One fourth of it is Rs 75000 and total is Rs 99000.

Core concept: Commission is payable on the remaining profit after the reserve is set aside, so deduct reserve first. Calculation: Reserve = 30% of Rs 500,000 = Rs 150,000. Remaining profit = Rs 500,000 − Rs 150,000 = Rs 350,000. A's commission = 8% of Rs 350,000 = 0.08×350,000 = Rs 28,000. Why other options are wrong: option B (Rs 40,000) is a common mistake—calculating 8% on the total profit instead of on the remaining profit. Exam tip: always follow the order of appropriation given in the deed before computing any percentage-based allowances.

A received Rs 144000 wrongly but correct share is about Rs 137143. So A must adjust back about Rs 6857.

Interest on partner loan is an expense before appropriation. Correct profit for appropriation is Rs 250000 minus Rs 18000 equal to Rs 232000.