Page No 2.88:
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.
Answer:
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When equal amount is withdrawn in the beginning of each quarter, the interest on drawings is calculated for an average period of 7.5 months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 drawing= total drawing×Rate
of drawing/100×Average month / 12
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When equal amount is withdrawn at the end of each quarter, the interest on drawings is calculated for an average period of 4.5 months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 drawing= total drawing×Rate
of drawing/100×Average month / 12
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When equal amount is withdrawn in the middle of each quarter, the interest on drawings is calculated for an average period of 6 months
Interest on drawing= total drawing×Rate
of drawing/100×Average month / 12
Interest on Ashok’s drawing =30,000×10/100×6/12 =1,500
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.
Answer:
Calculation of Interest on
Drawings
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
Calculation of Interest on Capital
Calculation of opening Capital
|
Tisha
|
Divya
|
Closing Capital
Add; Drawings
|
10,00,000
1,00,000
|
7,50,000
50,000
|
Less: Profit
|
11,00,000
2,50,000
|
8,00,000
2,50,000
|
Opening Capital
|
8,50,000
|
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
Page No 2.89:
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.
Answer:
Profit and Loss
Appropriation Account |
|||||
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
Page No 2.89:
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 |
Answer:
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
Page No 2.89:
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.
Answer:
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
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