Question

Mahi, Ruhi and Ginni are partners in a firm sharing profits and losses in the ratio of 6 : 4 : 1. Mahi guaranteed a profit of rupee 50,000 to Ginni. Net profit for the year ending 31st March, 2023 was rupee 1,10,000. Mahi’s share in the profit of the firm after giving the guaranteed amount to Ginni will be:

• A. rupee 20,000
• B. rupee 60,000
• C. rupee 40,000
• D. rupee 10,000

Hint:

In a profit guarantee, the guaranteeing partner bears any shortfall in the guaranteed amount before distributing the remaining profit.

Answer 1

The Correct Option is A

1. Total profit of the firm = rupee 1,10,000 

2. Profit-sharing ratio (Mahi: Ruhi: Ginni) = 6:4:1 

3. Distribution of profit as per the ratio: \[\text {Mahi’s share} = \frac{6}{11} \times 1,10,000 = rupee 60,000 \] \[ \text{Ruhi’s share} = \frac{4}{11} \times 1,10,000 = rupee 40,000 \] \[ \text{Ginni’s share} = \frac{1}{11} \times 1,10,000 = rupee 10,000 \] 

4. Guaranteed profit for Ginni = rupee 50,000. However, Ginni’s share from the distribution is only rupee 10,000. 
- Deficiency to be paid by Mahi = \( 50,000 - 10,000 = 40,000 \). 
- This amount is deducted from Mahi’s share. 

5. Final share of Mahi after adjusting the guarantee: \[ \text{Mahi’s final profit} = rupee 60,000 - rupee 40,000 = rupee 20,000. \] 

Thus, the correct answer is rupee20,000 (Option A).