Q.A, B, and C are partners sharing profits and losses in the ratio 5:3:2. Partner A personally guarantees that C's share of profit will not be less than ₹40,000 in any year. The firm's net profit for the year, before considering the guarantee, is ₹1,50,000. Show how the profit is to be distributed among the three partners.

First divide the profit normally in the 5:3:2 ratio; since C's normal share falls short of the ₹40,000 guarantee, A alone (as the sole guarantor) bears the entire deficiency.

Step 1 — Normal distribution in the agreed 5:3:2 ratio. A = ₹1,50,000 × 5/10 = ₹75,000. B = ₹1,50,000 × 3/10 = ₹45,000. C = ₹1,50,000 × 2/10 = ₹30,000.

Step 2 — Compare C's normal share against the guarantee. C's normal share is ₹30,000, but C is guaranteed at least ₹40,000. The deficiency = ₹40,000 − ₹30,000 = ₹10,000.

Step 3 — Identify who bears the deficiency. Since the guarantee in this question was given by A PERSONALLY (not by the firm as a whole), A alone bears the entire ₹10,000 deficiency — B's share is completely unaffected by the guarantee.

Step 4 — Final distribution. A's final share = ₹75,000 − ₹10,000 = ₹65,000. B's final share = ₹45,000 (unchanged). C's final share = ₹30,000 + ₹10,000 = ₹40,000 (exactly the guaranteed minimum). …

A frequent error is making B share part of the deficiency as well, simply because B is also a partner — when a guarantee is given by ONE SPECIFIC partner personally (rather than by the firm as a whole), only that guaranteeing partner …