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:
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Profit and Loss Appropriation Account |
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Dr. |
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Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Interest on Capital: |
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Profit and Loss A/c (Net Profit) |
2,20,000 |
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Atul’s Capital A/c |
50,000 |
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Interest on Capital: |
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Mithul’s Capital A/c |
60,000 |
1,10,000 |
Atul’s Capital A/c |
5,000 |
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Mithul’s Capital A/c |
5,000 |
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Profit transferred to: |
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Atul’s Capital A/c |
72,000 |
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Mithul’s Capital A/c |
48,000 |
1,20,000 |
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2,30,000 |
2,30,000 |
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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 |
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Dr. |
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Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Profit
and Loss A/c |
1,00,000 |
Interest
on Drawings A/c: |
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Reema |
3,000 |
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Seema |
3,000 |
6,000 |
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Loss
transferred to |
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Reema |
47,000 |
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Seema |
47,000 |
94,000 |
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1,00,000 |
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1,00,000 |
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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 |
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Dr. |
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|
Cr. |
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Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
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Interest on Capital A/c: |
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Profit and Loss A/c |
1,20,000 |
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Bhanu’s Current A/c |
80,000 |
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Interest on Drawings A/c: |
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Partap’s Current A/c |
1,00,000 |
1,80,000 |
Bhanu’s Current A/c |
3,750 |
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Partap’s Current A/c |
7,500 |
11,250 |
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Loss transferred to |
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Bhanu’s Current A/c |
24,375 |
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Partap’s Current A/c |
24,375 |
48,750 |
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1,80,000 |
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1,80,000 |
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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 |
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Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
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2020 |
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March
31 |
Profit & Loss Appropriation A/c |
Dr. |
|
40,000 |
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To Amit’s Current A/c |
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15,000 |
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To Sumit’s Current
A/c |
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25,000 |
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(Interest on capital transferred to Profit & Loss
Appropriation A/c) |
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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 |
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Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
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2020 |
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March
31 |
Profit & Loss Appropriation A/c |
Dr. |
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1,00,000 |
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To Kamal’s Current A/c |
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55,000 |
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To Kapil’s Current
A/c |
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45,000 |
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(Interest on capital transferred to Profit & Loss
Appropriation A/c) |
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Profit and Loss Appropriation Account for
the year ended 31 March 2020 |
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Dr. |
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Cr. |
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Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
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Interest on Capital A/c: |
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Profit and Loss A/c |
6,00,000 |
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Kamal |
55,000 |
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Kapil |
45,000 |
1,00,000 |
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Profit transferred to: |
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Kamal’s Current A/c |
2,50,000 |
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Kapil’s Current A/c |
2,50,000 |
5,00,000 |
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6,00,000 |
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6,00,000 |
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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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