Question

P, Q and R were partners in a firm sharing profits and losses in the ratio 2 : 2 : 1. They admitted L as a new partner for 1/5 share in the profits. L was given a guarantee that - his share of the profit would be 1,00,000. Any deficiency arising on account of guarantee to L will be borne by Q. The profit of the firm during the year ended 31.3.2021 was ₹ 4,00.000. The amount of deficiency borne by Q was:

Options

• ₹ 80,000

• ₹ 20,000

• ₹ 10,000

• ₹ 6,667

Answer 1

₹ 20,000

Explanation:

Profit sharing Ratio = 2 : 2 : 1

Profit Earned = 4,00,000

L's share of profit = `1/5`th

= `1/5xx4,00,000`

= ₹ 80,000

Amount of Guarantee given = ₹ 1,00,000

Amount to be borne by Q = ₹ 1,00,000 − ₹ 80,000

= ₹ 20,000