12th Ts grewal 2020-21Question 16 to 20 Accounting for partnership firm- fundamentals

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 2.84:

Question 16;

Atul and Mithun are partners sharing profits m the ratio of 3: 2

Balances as on 1st April 2020 were as follows:

Capita! Accounts (fixed): Atul- `5,00,000 and Mithun- `6,00,000

Loan Accounts: Atul - `3,00,000 (Cr.) and Mithun - `2,00,000 (Dr.)

It was agreed to allow and charge interest @ 8% p.a. Partnership Deed provided to allow interest on capital @ 10% p.a. Interest on Drawings was charged `5,000 each.

Profit before giving effect to above was `2,28,000 for the year ended 31st March, 2020.

Prepare Profit and Loss Appropriation Account.

 

Answer; Answer:

 

Profit and Loss Appropriation Account

Dr.

 

 

 

Cr.

Particulars

Amount

`

Particulars

Amount

`

Interest on Capital:

 

Profit and Loss A/c (Net Profit)

2,20,000

Atul’s Capital A/c

50,000

 

Interest on Capital:

 

Mithul’s Capital A/c

60,000

1,10,000

Atul’s Capital A/c

5,000

 

 

 

Mithul’s Capital A/c

5,000

 

Profit transferred to:

 

 

 

 

Atul’s Capital A/c

72,000

 

 

Mithul’s Capital A/c

48,000

1,20,000

 

 

2,30,000

2,30,000

 

 

 

 

Working Notes:

WN1 Profit After allowed and charged Atul and Mithul Respectively

2,28,000 -24,000 +16,000 = 2,20,000
WN2 interest allowed on loan given by Atul

Interst on  loan=3,00,000×8/100 = 24,000

 

WN3 interest Charged on loan given to Mithul

Interst on  loan=2,00,000×8/100=16,000

 

WN4 Calculation of Interest on Capital

Interst on Atul’s loan=5,00,000×10/100=50,000

Interst on Mithul's loan=6,00,000×10/100=60,000

 

WN5 Calculation of Profit Share of each Partner

Profit Share of Atul =1,20,000×3/5=72,000

Profit Share of Mithul =1,20,000×2/5=48,000

 



Page No 2.84:

Question 17:

Reema and Seema are partners sharing profits equally. The Partnership Deed provides that both Reema and Seema will get monthly salary of ` 15,000 each, Interest on Capital will be allowed @ 5% p.a. and Interest on Drawings will be charged @ 10% p.a. Their capitals were ` 5,00,000 each and drawings during the year were ` 60,000 each.
The firm incurred a loss of
` 1,00,000 during the year ended 31st March, 2019.
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2019.

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2019

Dr.

 

Cr.

Particulars

Amount

`

Particulars

Amount

`

Profit and Loss A/c

1,00,000

Interest on Drawings A/c:

 

 

 

Reema

3,000

 

 

 

Seema

3,000

6,000

 

 

Loss transferred to

 

 

 

  Reema

47,000

 

 

 

  Seema

47,000

94,000

 

1,00,000

 

1,00,000

 

 

 

 

 

 

 

 

 

 

 

Note: Since the firm has incurred loss, no interest on capital and salary will be allowed to the partners. However, interest on drawings will be charged from each of them @ 10% p.a. on the amounts withdrawn by them for an average period of six months.

 



Page No 2.84:

Question 18:

Bhanu and Partab are partners sharings profits equally. Their fixed capitals as on 1st April, 2019 are  ` 8,00,000 and  ` 10,00,000 respectively. Their drawings during the year were  ` 50,000 and  ` 1,00,000 respectively. Interest on Capital is a charge and is to be allowed @ 10% p.a. and interest on drawings is to be charged @ 15% p.a. Net Profit for the year ended 31st March, 2020 was  ` 1,20,000.
Prepare Profit and Loss Appropriation Account.

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2020

Dr.

 

 

Cr.

Particulars

Amount

( `)

Particulars

Amount

( `)

Interest on Capital A/c:

 

Profit and Loss A/c

1,20,000

Bhanu’s Current A/c

80,000

 

Interest on Drawings A/c:

 

Partap’s Current A/c

1,00,000

1,80,000

Bhanu’s Current A/c

3,750

 

 

 

Partap’s Current A/c

7,500

11,250

 

 

Loss transferred to

 

 

 

  Bhanu’s Current A/c

24,375

 

 

 

  Partap’s Current A/c

24,375

48,750

 

 

 

 

 

1,80,000

 

1,80,000

 

 

 

 

 



Page No 2.85:

Question 19:

Amit and Sumit entered into partnership on 1st April, 2019 contributing  ` 1,50,000 and  ` 2,50,000 respectively towards capital. The Partnership Deed provided for interest on capital @ 10% p.a. It also provided that Capital Accounts shall be maintained following Fixed Capital Accounts method. The firm earned net profit of  ` 1,00,000 for the year ended 31st March 2020.
Pass the Journal entry for interest on capital.

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

2020

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

40,000

 

 

    To Amit’s Current A/c

 

 

 

15,000

 

    To Sumit’s Current A/c

 

 

 

25,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

Working Notes:

WN1: Calculation of Interest on Capital:
Amit's Interest on Capital=1,50,000×10/100=
` 15,000

Sumit's Interest on Capital=2,50,000×10/100=` 25,000

 



Page No 2.85:

Question 20:

Kamal and Kapil are partners having fixed capitals of  ` 5,00,000 each as on 31st March, 2019. Kamal introduced further capital of  ` 1,00,000 on 1st October, 2019 whereas Kapil withdrew  ` 1,00,000 on 1st October, 2019 out of capital.
Interest on capital is to be allowed @ 10% p.a.
The firm earned net profit of  ` 6,00,000 for the year ended 31st March 2020.
Pass the Journal entry for interest on capital and prepare Profit and Loss Appropriation Account.

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

2020

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

1,00,000

 

 

    To Kamal’s Current A/c

 

 

 

55,000

 

    To Kapil’s Current A/c

 

 

 

45,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended 31 March 2020

Dr.

 

 

Cr.

Particulars

Amount

( `)

Particulars

Amount

( `)

Interest on Capital A/c:

 

Profit and Loss A/c

6,00,000

Kamal

55,000

 

 

 

Kapil

45,000

1,00,000

 

 

Profit transferred to:

 

 

 

Kamal’s Current  A/c

2,50,000

 

 

 

Kapil’s Current  A/c

2,50,000

5,00,000

 

 

 

6,00,000

 

6,00,000

 

 

 

 


 

Working Notes:

WN1: Calculation of Interest on Capital:

Kamal = (5,00,000×10×6÷100×12) + (6,00,000×10×6÷100×12) = `. 55,000

Kapil=(5,00,000×10×6÷100×1) + (4,00,000×10×6÷100×12) = `. 45,000
 

 

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Chapter-1: Accounting For Partnership Firms-Fundamentals | 2021-2022

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