8 P and Q are in partnership, sharing profits in the ratio 2:1. On 1 July 2004 they admitt
8 P and Q are in partnership, sharing profits in the ratio 2:1. On 1 July 2004 they admitted P’s son R as a partner. P
guaranteed that R’s profit share would not be less than $25,000 for the six months to 31 December 2004. The profitsharing
arrangements after R’s admission were P 50%, Q 30%, R 20%. The profit for the year ended 31 December
2004 is $240,000, accruing evenly over the year.
What should P’s final profit share be for the year ended 31 December 2004?
A $140,000
B $139,000
C $114,000
D $139,375
80,000 + 60,000 – 1,000 = 139,000
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