Double Entry Book Keeping Ts Grewal Volume-I 2021-22
Solutions for Class 12 Commerce
Accountancy
Chapter 2 - Accounting For
Partnership Firms Fundamentals
Page
No 2.81:
Question
1:
In
the absence of Partnership Deed, what are the rules relation to :
(a) Salaries of partners,
(b) Interest on partners’ capitals,
(c) Interest on loan by partner,
(d) Division of profit,
(e) Interest on partners’ drawings
(f)
Interest on loan to partners?
Answer:
|
|
Items
(Points) |
Provision
in the Absence of Partnership Deed |
|
(a) |
Salaries of Partners |
No
Salary will be allowed to Partners. |
|
(b) |
Interest on Partners’
Capitals |
No
interest will be allowed to Partners on
Capital |
|
(c) |
Interest on Loan by
Partners’ |
6%
p.a. Interest will be allowed on the amount
given by |
|
(d) |
Division of Profit |
Profits will be shared equally, it is irrespective the |
|
(e) |
Interest on Partners’
Drawings |
No
Interest will be charged on the Drawings
of Partners |
|
(F) |
Interest on loan to partner |
Not
charged from partner |
Page
No 2.81:
Question
2:
Mahesh,
Ramesh and Suresh are partners in a firm. They do not have a Partnership Deed.
At the end of the first year of the commencement of the firm, they have faced
the following problems :
(a) Mahesh wants that interest on capital should be allowed to the partners but
Ramesh and Suresh do not agree.
(b) Ramesh wants that the partners should be allowed to draw salary but Mahesh
and Suresh do not agree.
(c) Suresh wants that the loan given by him to the firm should bear interest @
10% p.a. but Mahesh and Ramesh do not agree.
(d) Mahesh and Ramesh having contributed larger amounts of capital, desire that
the profits should be divided in the ratio of their capital contribution but
Suresh does not agree.
State how you will settle these disputes if the partners approach you for
purpose.
Answer:
|
|
Disputes |
Possible Judgements |
|
(a) |
Mahesh
wants that interest on capital should be allowed to the partners but Ramesh
and Suresh do not agree. |
As
per Partnership Act, no interest on Capital will be allowed. Reason:
There is no partnership agreement among Mahesh, Ramesh and Suresh regarding
interest on capital. |
|
(b) |
Ramesh
wants that the partners should be allowed to draw salary but Mahesh and
Suresh do not agree. |
No
salary
will be allowed to any partner. Reason:
There is no partnership agreement. |
|
(c) |
Suresh
wants that the loan given by him to the firm should bear interest @ 10% p.a.
but Mahesh and Ramesh do not agree. |
Interest
on partner’s loan (Suresh’s loan) will be allowed at 6% p.a. Reason:
As per Partnership Act, in the absence of partnership agreement, interest on
partners loan is allowed at 6% p.a. |
|
(d) |
Mahesh
and Ramesh having contributed larger amounts of capital, desire that the
profits should be divided in the ratio of their capital contribution but
Suresh does not agree. |
Profit
will be shared equally and not in the capital ratio. Reason:
There is no partnership agreement. |
Page
No 2.81:
Question
3:
Following
differences have arisen among P, Q and R. State who is correct in each case:
(a) P used ` 20,000 belonging to the firm and made a
profit of `
5,000. Q and R want the amount to be given to the firm?
(b) Q used `5,000
belonging to the firm and suffered a loss of ` 1000. He wants the firm to bear the
loss?
(c) P and Q want to purchase goods from A Ltd., R does not agree?
(d) Q and R want to admit C as partner, P does not agree?
(e)
R had given loan of `1,00,000
to firm and demands interest @ 10% p.a. P
and Q do not want to pay the interest.
Answer:
(a)
P is bound to pay `
20,000 together with profit of `
5,000 to the firm because this amount belongs to the firm.
Explanation:
As per Principal and Agent relationship, P is principal as well as agent to the
firm and to Q and R. As per this rule, any profit earned by an agent (P) by
using the firm’s property is attributable to the firm.
(b)
Q is liable to pay `
5,000 to the firm. As per the Partnership Act, 1932, every partner of a
partnership firm is liable to the firm for any loss caused by his/her willful
negligence.
Explanation:
Here Q is solely responsible for the loss of ` 1,000 because he used the property of the firm and also
represented himself as a principal rather than an agent to the other partners
and to the firm.
(c)
P and Q may buy goods from A Ltd.
Explanation:
As per Partnership Act, 1932, a partner has a right to buy and sell goods
without consulting the other partners unless a Public Notice has been given by
the partnership firm to restrict the partners to buy and sell.
(d)
C will not be admitted because one of the partners P has not agreed to admit C.
(e)
P,Q and R are not correct
Explanation:
As per Partnership Act, a new partner cannot be admitted into a firm unless all
the existing partners agree on the same decision. In other words, a new partner
can be admitted in a partnership firm with the consent of all the existing
partners.
Page
No 2.81:
Question 4: Bose, Sarkar and Chatterjee are partners
in a firm and do not have a Partnership Deed. Bose introduced
further capital of `5,00,000 on 1st October, 2020. Whereas Chatterjee took a loan of
` 50,000 from the firm
on 1st October, 2020. Disputes have arisen
among them on the following issues:
(a)
Bose demands interest@10% p.a. on `
5,00,000 being his extra capital.
(b)
Sarkar desires that his son Deep should be admitted as partner and he will give
him half of his share
Bose
and Chatterjee do not agree.
(c)Bose
and Sarkar are of the view that Chatterjee should be charged interest on loan
from the firm at
the lending rate of the banks, which is 12%
p.a.
(d)
Sarkar has withdrawn `50,000
from the firm for his personal use. Bose and Chatterjee are of the view
that Sarkar should be charged interest @ 10%
p.a.
You
are required to give solution to each issue of dispute.
Answer:
In
the absence of Partnership Deed, the provisions of Indian Partnership Act, 1932
will apply as follows;
(a)
Interest will not be allowed on extra capital introduced by Bose,
(b)
Deep cannot be admitted as Bose and Chatterjee don't agree, no partner has
right to admit any one as a partner,
(c)
Interest will not be charged from Chatterjee as rate of interest was not
agreed.
(d)
Interest on drawings will not be charged on Sarkar’s drawings.
Page
No 2.82:
Question
5:
A
and B are partners from 1st April, 2020, without a Partnership Deed and they
introduced capitals of `35,000 and `20,000
respectively. On 1st October, 2020, A advanced loan of `8,000 to the firm without any
agreement as to interest. The profit and Loss Account for the year ended 31st
March, 2021 shows a profit of ` 15,000 but the partners cannot
agree on payment of interest and on the basis of division of profits.
You are required to divide the profits between them giving reasons for your
method.
Answer:
|
Profit and Loss Appropriation Account for the year ended March 31, 2021 |
||||
|
Dr. |
|
|
Cr. |
|
|
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
|
|
|
|
Profit
& loss a/c (Profit
after Interest 15,000-240) |
14,760 |
|
|
Profit
transferred to: |
|
|
|
|
|
A’s Capital A/c |
7,380 |
|
|
|
|
B’s Capital A/c |
7,380 |
14,760 |
|
|
|
|
15,000 |
|
15,000 |
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of
Interest on Loan
As
per the Partnership Act, if there is no partnership agreement regarding rate of
interest on loan, it is provided at 6% p.a.
Amount
of Loan = ` 8,000
Time
Period (from October 01 to March 31) = 6 months
Interest on A' s loan=8,000×6/100×6/12=240
WN 2 Calculation of
Profit Share of each Partner
In
the absence of partnership deed, profits of a firm are distributed equally
among all the partners.
Profit
after Interest on A’s loan = 15,000 - `
240 = ` 14,760
Profit of A and
B=14,760×1/2=7,380
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