prepare P & L Appropriation A/c.

Question

23. Simi, Mini and Suni are partners in a firm sharing P \& L in the ratio \( 2: 2: 1 \). Suni was guaranteed a minimum amount of Rs 20,000 as share of profit every year. Any deficiency shall be met by Simi and Mini. The profit for the year were Rs 60,000 prepare \( P \) \& \( L \) Appropriation \( A / c \).

Answer 1

To prepare the Profit and Loss Appropriation Account, we first calculate the actual shares of profit for Simi, Mini, and Suni. Then we adjust Suni's share according to the guarantee. Finally, any deficiency in Suni's guaranteed share is borne by Simi and Mini. 

Here's the calculation:

1. Total profit for the year: Rs 60,000

2. Ratio of profit sharing: Simi : Mini : Suni = 2 : 2 : 1

3. Total parts in the ratio = 2 + 2 + 1 = 5

Simi's share = (2/5) * Rs 60,000 = Rs 24,000

Mini's share = (2/5) * Rs 60,000 = Rs 24,000

Suni's share = (1/5) * Rs 60,000 = Rs 12,000

Since Suni was guaranteed Rs 20,000, which is greater than his actual share of Rs 12,000, the deficiency is Rs 20,000 - Rs 12,000 = Rs 8,000. 

This deficiency is to be met by Simi and Mini in their profit-sharing ratio, which is 2:2. So, each of them bears half of the deficiency.

Deficiency to be borne by Simi = (2/4) * Rs 8,000 = Rs 4,000

Deficiency to be borne by Mini = (2/4) * Rs 8,000 = Rs 4,000

Now, let's prepare the Profit and Loss Appropriation Account:

Profit & Loss Appropriation Account Particulars Amount (Rs) -------------------------------- Net profit 60,000 Less: Suni's guarantee 20,000 Actual distribution:   Simi 24,000   Mini 24,000   Suni (Deficiency) 8,000 -------------------------------------------------------------------------------------------------------------- Total 56,000