90 :- Three Chartered Accountants Abhijit, Baljit, and Charanjit form a partnership, profits being shared in the ratio of 3:2:1 subject to the following:
(a) Charanjit’s share of profit is guaranteed to be not less than Rs 15,000 p.a.
(b) Baljit gives a guarantee to the effect that the gross fee earned by him for the firm shall be equal to his average gross fee of the preceding five years when he was carrying on his profession alone, which on average works out at Rs 25,000.
The Profit for the first year of the partnership is Rs 75,000. The gross fee earned by Baljit for the firm is Rs 16,000.
You are required to show Profit and Loss Appropriation Account after giving effect to the above.
Solution:-
