Page No 2.87:
Question 31:
Shiv, Mohan
and Gopal are partners sharing profits and losses in the ratio of 2 :
2 : 1 respectively. Shiv is entitled to a commission of 10% on the net
profit. Net profit for the year is ` 1,10,000.
Determine the amount of commission payable to Shiv.
Answer:
Net Profit before charging commission = ` 1,10,000
Commission to Shiv = 10% of on Net Profit before charging such commission
Partner' s Commission = (Net
profit×rate of commission)/100
Shiv ' s Commission =(1,10,000×10)/100=11,000
Page No 2.87:
Question 32:
Abha,
Bobby and
Vineet are partners sharing profits and losses equally. As per
Partnership Deed, Vineet is entitled to a commission of 10% on the net
profit after charging such commission. The net profit before charging
commission is `2,20,000.
Determine the amount of commission payable to Vineet.
Answer:
Net Profit before charging Commission = ` 2,20,000
Commission to Vineet = 10% of on Net Profit after charging such commission
Partner’s Commission = (Net profit×Rate of
commission)/(100+Rate of commission)
Vineet's Commission
=(2,20,000×10)/(100+10)=20,000
Page No 2.87:
Question 33:
A, B, C, and D are partners in a firm sharing profits as 4 : 3 : 2 : 1 respectively. It earned a profit of `1,80,000 for the year ended 31st March, 2021. As per the Partnership Deed, they are to charge a commission @ 20% of the profit after charging such commission which they will share as 2 : 3 : 2 : 3. You are required to show appropriation of profits among the partners.
Answer:
Profit and Loss Appropriation Account for the year ended March 31, 2021 |
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Dr. |
Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Partners’ Commission: |
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Profit and Loss A/c (Net Profit) |
1,80,000 |
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A’s Capital A/c |
6,000 |
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B’s Capital A/c |
9,000 |
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C’s Capital A/c |
6,000 |
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D’s Capital A/c |
9,000 |
30,000 |
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Profit transferred to: |
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A’s Capital A/c |
60,000 |
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B’s Capital A/c |
45,000 |
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C’s Capital A/c |
30,000 |
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D’s Capital A/c |
15,000 |
1,50,000 |
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1,80,000 |
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1,80,000 |
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Working Notes:
WN 1 Calculation of Partners’ Commission
Partners’ Commission = 20% on Net Profit after charging such commission
Partners' Commission = (Net profit×Rate of commission)/(100+Rate of commission)
Partners’ Commission = (1,80,000×20)/(100+20)=30,000
This commission is to be shared by the partners in the ratio of 2 : 3 : 2 : 3
A' s Commission =(30,000×2)/10=6,000
B' s Commission =(30,000×3)/10=9,000
C' s Commission =(30,000×2)/10=6,000
D's Commission =(30,000×3)/10=9,000
WN 2 Calculation of Profit Share of each Partner
Profit available for Distribution = 1,80,000 ` 30,000 = ` 1,50,000
Profit sharing ratio = 4 : 3 : 2 : 1
A' s Profit share=(1,50,000×4)/10=60,000
B' s Profit share=(1,50,000×3)/10=45,000
C' s Profit share=(1,50,000×2)/10=30,000
D's Profit share=(1,50,000×1)/10=15,000
Page No 2.87:
Question 34:
X and Y
are partners in a firm. X is entitled to a salary of ` 10,000 per month and commission of 10% of the net profit
after partners' salaries but before charging commission. Y is entitled
to a salary of ` 25,000 p.a. and commission of 10% of the net profit after
charging all commission and partners' salaries. Net profit before providing for
partners' salaries and commission for the year ended 31st March, 2020 was ` 4,20,000. Show
distribution of profit.
Answer:
Profit and Loss
Appropriation Account for the year
ended March 31, 2020 |
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Dr. |
Cr. |
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Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
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Partners’ Salary: |
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Profit and Loss A/c (Net
Profit) |
4,20,000 |
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X’s Capital A/c (10,000×12) |
1,20,000 |
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Y’s Capital A/c |
25,000 |
1,45,000 |
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Partners’ Commission: |
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X’s Capital A/c |
27,500 |
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Y’s Capital A/c |
22,500 |
50,000 |
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Profit transferred to: |
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X’s Capital A/c |
1,12,500 |
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Y’s Capital A/c |
1,12,500 |
2,25,000 |
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4,20,000 |
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4,20,000 |
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Working
Notes:
WN
1 Calculation of Commission
Commission
to X = 10% of Net Profit after partners’ salaries but before charging such
commission
Profit after Partners’ Salaries = 4,20,000- `1,45,000 = ` 2,75,000
Commission to X |
= Profit after Partners’
Salaries × Rate of commission / 100 |
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= 2,75,000 × 10 /100= 27,500 |
Commission
to Y = 10% of Net Profit after charging Commission and Partners’ Salaries
Profit after commission and partners’
salaries = 4,20,000 - ` 1,45,000 - ` 27,500 = `2,47,500
Commission to Y |
= Profit after commission
and partners’ salaries × Rate of commission / 100+Rate |
|
= 2,47,500 × 10 /100+10= 22,500 |
WN
2 Calculation of Profit Share of each Partner
Profit available for distribution = 4,20,000 -
` 1,45,000 - ` 50,000 = ` 2,25,000
Profit sharing ratio = 1 : 1
Profit share of each X and Y = 2,25,000× ½ = `1,12,500
Page No 2.88:
Question 35:
Ram and Mohan, two partners, drew for their personal use `1,20,000 and ` 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?
Answer:
In this question, date of drawings made by the partners is not given. Therefore, interest on drawings is calculated on average basis for a period of six months.
Interest on Ram’s Drawings =
1,20,000× 6/ 100×6/12=3,600
Interest on Mohan’s Drawings
= 80,000× 6/ 100×6/12=2,400
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