Prateek, Charu and Sirima were partners in a firm sharing profits in the ratio of $\displaystyle 3$ : $\displaystyle 2$ : 1. Prateek retired from the firm on 31st March, 2023. Charu and Sirima decided that the capital of the new firm will be ₹ $\displaystyle 6,30$,000. The capital accounts of Charu and Sirima after all adjustments on the date of retirement showed a credit balance of ₹ $\displaystyle 4,35,000$ and ₹ $\displaystyle 1,89,000$ respectively. Calculate the amount of actual cash to be brought into the firm or to be paid to the partners. Also pass necessary journal entries.

OR

Chaman, Burman and Aman were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : $\displaystyle 2$ : 1. Aman was guaranteed a minimum amount of ₹ $\displaystyle 60,000$ as his share of profit every year. The net profit for the year ended 31st March, $\displaystyle 2023$ amounted to ₹ $\displaystyle 1,20$,000. Pass necessary journal entries in the books of the firm showing the distribution of profit amongst the partners.

Calculation of amount of cash to be brought into the firm or to be paid to the partners: Charu Sirima New capital $\displaystyle 2$/$\displaystyle 3$ X $\displaystyle 6,30,000$ $\displaystyle 1$/$\displaystyle 3$ X $\displaystyle 6,30,000$ (₹$\displaystyle 6,30,000$ in new ratio $\displaystyle 2$:$\displaystyle 1$) = ₹$\displaystyle 4,20,000$ = ₹$\displaystyle 2,10,000$ Adjusted capital ₹$\displaystyle 4,35,000$ ₹$\displaystyle 1,89,000$ Paid ₹$\displaystyle 15,000$ Brought ₹$\displaystyle 21,000$ Books of Prateek, Charu and Sirima Journal Date Particulars L.F Dr. Amount Cr. Amount ₹ ₹ $\displaystyle 2023$ Cash A/c Dr. $\displaystyle 21,000$ March $\displaystyle 31$ To Sirima’s Capital A/c $\displaystyle 21,000$ (Cash brought in by Sirima on retirement of Prateek) $\displaystyle 2023$ Charu’s Capital A/c Dr. $\displaystyle 15,000$ March $\displaystyle 31$ To Cash A/c $\displaystyle 15,000$ (Cash paid to Charu on retirement of Prateek) Q. (b) Chaman, Burman and Aman were……………………. Ans. Books of Chaman, Burman and Aman Journal Date Particulars L.F Dr.Amount Cr.Amount ₹ ₹ $\displaystyle 2023$ (i) March $\displaystyle 31$ Profit & Loss A/c Dr $\displaystyle 1,20,000$ To Profit & Loss Appropriation A/c $\displaystyle 1,20,000$ (Net profit transferred to Profit & Loss Appropriation Account) $\displaystyle 2023$ (ii) March $\displaystyle 31$ Profit & Loss Appropriation A/c Dr $\displaystyle 1,20,000$ To Chaman’s Capital A/c $\displaystyle 60,000$ To Burman’s Capital A/c $\displaystyle 40,000$ To Aman’s Capital A/c $\displaystyle 20,000$ (Distribution of profit among partners in the ratio of $\displaystyle 3$:$\displaystyle 2$:$\displaystyle 1$) $\displaystyle 2023$ (iii) March $\displaystyle 31$ Chaman’s Capital A/c Dr $\displaystyle 24,000$ Burman’s Capital A/c Dr $\displaystyle 16,000$ To Aman’s Capital A/c $\displaystyle 40,000$ (Deficiency of Aman, met by Chaman and Burman in the ratio of $\displaystyle 3$:$\displaystyle 2$) Alternate combined entry for (ii) & (iii) Profit & Loss Appropriation A/c Dr $\displaystyle 1,20,000$ To Chaman’s Capital A/c $\displaystyle 36,000$ To Burman’s Capital A/c $\displaystyle 24,000$ To Aman’s Capital A/c $\displaystyle 60,000$ (Distribution of profit among partners after adjustment for guarantee)