# 12th Ts grewal 2021-22 Question 41 to 45 Accounting for partnership firm- fundamentals

#### Question 41:

Calculate interest on drawings of Ashok @ 10% p.a. for the year ended 31st March, 2021, in each of the following alternative cases:
Case 1.  If he withdrew
`7,500 in the beginning of each quarter.
Case 2.  If he withdrew
`7,500 at the end of each quarter.
Case 3.  If he withdrew
`7,500 during the middle of each quarter.

Total Drawings = 7,500 × 4 = ` 30,000

Interest Rate = 10% p.a.

Case (a)

When equal amount is withdrawn in the beginning of each quarter, the interest on drawings is calculated for an average period of 7.5 months

#### Interest on Ashok’s drawing =30,000×10/100×7.5/12  =1,875

Case (b)

When equal amount is withdrawn at the end of each quarter, the interest on drawings is calculated for an average period of 4.5 months

#### Interest on Ashok’s drawing =30,000×10/100×4.5/12 =1,125

Case (c)

When equal amount is withdrawn in the middle of each quarter, the interest on drawings is calculated for an average period of 6 months

#### Page No 2.88:

Question 42: The capital accounts of Tisha and Divya showed credit balances of  `10,00,000 and `7,50,000 respectively after taking into account drawings and net profit of  `5,00,000. The drawings of the partners during the year 2020-21 were:

(i) Tisha withdrew `25,000 at the end of each quarter.

(ii) Divya's drawings were:

 31st May, 2020 `20,000 1st November, 2020 `17,500 1st February, 2021 `12,500

Calculate interest on partners' capitals@ 10% p.a. and interest on partners' drawings@ 6% p.a. for the year ended 31st March, 2021.

#### Tisha’s Total Drawings= 25,000×4=1,00,000

Tisha’s Interest on Drawings= 1,00,000×3/100×4.5/12=2,250

Divya’s Interest on Drawings

 Date of Drawings Drawings Time left after Drawing Product 31-5-2020 20,000 10 2,00,000 1-11-2020 17,500 5 87,500 1-2-2021 12,500 2 25,000 3,12,500

Divya’s Interest on Drawings = 3,12,500×6/100×1/12=1,563

#### 5,50,000

Tisha’s Interest on Capital = 8,50,000×10/100=85,000

Divya’s Interest on Capital = 5,50,000×10/100=55,000

#### Question 43:

Amit and Vijay started a partnership business on 1st April, 2020. Their capital contributions were `2,00,000 and  `1,50,000 respectively. The Partnership Deed provided as follows:
(a) Interest on capital be allowed @10% p.a.
(b) Amit to get a salary of
`2,000 per month and Vijay `3,000 per month.
(c) Profits are to be shared in the ratio of 3 : 2.
Net profit for the year ended 31st March, 2021 was
`2,16,000. Interest on drawings amounted to `2,200 for Amit and `2,500 for Vijay.
Prepare Profit and Loss Appropriation Account.

 Profit and Loss Appropriation Account for the year ended 31st March, 2021 Dr. Cr. Particulars Amount ( `) Particulars Amount ( `) Interest on Capital: Profit and Loss A/c (Net Profit) 2,16,000 Amit’s Capital A/c 20,000 Interest on Drawings A/c: Vijay’s Capital A/c 15,000 35,000 Amit’s Capital A/c 2,200 Salary to: Vijay’s Capital A/c 2,500 4,700 Amit (2,000 × 12) 24,000 Vijay (3,000 × 12) 36,000 60,000 Profit transferred to: Amit’s Capital A/c 75,420 Vijay’s Capital A/c 50,280 1,25,700 2,20,700 2,20,700

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on Amit’s Capital=2,00,000×10/100=20,000

Interest on Vijay’s Capital=1,50,000×10/100=15,000

WN 2 Calculation of Profit Share of each Partner

Divisible Profit = 2,16,000 + 4,700 - ` 35,000 - ` 60,000 = ` 1, 25,700

Profit sharing ratio = 3 : 2

Amit’s profit share=1,25,700×3/5=75,420

Vijay’s profit share=1,25,700×2/5=50,280

#### Question 44:

Prepare Capital Accounts of the Partners Ajay and Sanjay from the following information, If their capitals are fluctuating:

 Ajay ( `) Sanjay ( `) Capital on 1st April, 2020 4,00,000 3,00,000 Drawings during the year ended 31st march, 2021 50,000 30,000 Interest on Capital 5% p.a. 5% p.a. Interest on Drawings 1,250 750 Share of Profit for the year ended 31st march, 2021 60,000 50,000 Partner's Salary 36,000 ..... Commission 5,000 3,000

 Partners’ Capital Accounts Dr. Cr. Particulars Ajay ( `) Sanjay ( `) Particulars Ajay ( `) Sanjay ( `) Drawings A/c 50,000 30,000 Balance b/d 4,00,000 3,00,000 Interest on Drawings A/c 1,250 750 Interest on Capital A/c 20,000 15,000 P&L Appropriation A/c 60,000 50,000 Balance c/d 4,69,750 3,37,250 Partners’ Salary 36,000 – Commission 5,000 3,000 5,21,000 3,68,000 5,21,000 3,68,000

Working Note:

Calculation of Interest on Capital

Interest on Ajay’s capital = 4,00,000×5/100=20,000

Interest on Sanjay’s capital = 3,00,000×5/100=15,000

#### Question 45:

A and B are partners sharing profits and losses in the ratio of 3 : 1. On 1st April, 2020, their capitals were: A `50,000 and B `30,000. During the year ended 31st March, 2021 they earned a net profit of `50,000. The terms of partnership are:
(a) Interest on capital is to allowed @ 6% p.a.
(b) A will get a commission @ 2% on turnover.
(c) B will get a salary of
`500 per month.
(d) B will get commission of 5% on profits after deduction of all expenses including such commission.
Partners' drawings for the year were: A
`8,000 and B `6,000. Turnover for the year was `3,00,000.
After considering the above facts, you are required to prepare Profit and Loss Appropriation Account and Partners' Capital Accounts.

 Profit and Loss Appropriation Account for the year ended 31st March, 2021 Dr. Cr. Particulars Amount ( `) Particulars Amount ( `) Interest on  Capital: Profit and Loss A/c (Net Profit) 50,000 A’s Capital A/c 3,000 B’s Capital A/c 1,800 4,800 B’s Salary (500 × 12) 6,000 Partner’s  Commission A’s Capital A/c 6,000 B’s Capital A/c 1,581 7,581 Profit transferred to: A’s Capital A/c 23,714 B’s Capital A/c 7,905 31,619 50,000 50,000

 Partners’ Capital Accounts Dr. Cr. Particulars A ( `) B ( `) Particulars A ( `) B ( `) Drawings A/c 8,000 6,000 Balance b/d 50,000 30,000 Interest on Capital A/c 3,000 1,800 Commission A/c 6,000 1,581 Salary A/c 6,000 Balance c/d 74,714 41,286 P/L Appropriation A/c 23,714 7,905 82,714 47,286 82,714 47,286

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on A’s capital=50,000×6/100=3000

Interest on B’s capital=30,000×6/100=1,800

WN 2 Calculation of Commission to Partners

A’s commission = 2% on turnover

=3,00,000×2/100=6,000

Commission to B = 5% on Profits after all Expense including such Commission

Profits after all expense = 50,000- ` 4,800 -` 6,000- ` 6,000 = ` 33,200

B’s commission= Profit after all expenses×Rate of commission/100+Rate

33.200×5/105=1,581 (approx.)

WN 3 Calculation of Profit Share of each Partner

Profit available for Distribution = 50,000 -` 4,800 -` 6,000 -`7,581 = ` 31,619

Profit sharing ratio = 3 : 1

A’s profit share= 31,619×3/4=23,716

B’s profit share= 31,619×1/4=7,905