12th Ts grewal 2021-22 Question 51 to 55 Accounting for partnership firm- fundamentals

Question 51: Yadu, Vidu and Radhu were partners in a firm sharing profits in the ratio of 4:3:3. Their fixed capitals

1st April, 2018 were ` 9,00,000, `5,00,000 and ` 4,00,000 respectively. On 1st November, 2018, Yadu gave a loan of `80,000 to the firm, as per the partnership agreement.

(i) The partners were entitled to an interest on capital @ 6% p.a.

(ii)Interest on partners' drawings was to be charged@ 8% p.a.

The firm earned profit of `2,53,000 (after interest on Yadu's Loan) during the year 2018-19. Partners drawings for the year amounted to:

Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2019.

 Profit and Loss Appropriation Account Dr. Cr. Particulars Amount ` Particulars Amount ` Interest on Capital: Profit and Loss A/c (Net Profit) 2,53,000 Yadu’s Current A/c Vidu’s Current A/c 54,000 30,000 Interest on Capital: Radhu’s Current A/c 24,000 1,08,000 Yadu’s Current A/c Vidu’s Current A/c 3.200 2,800 Radhu’s Current A/c 2,000 8,000 Profit transferred to: Yadu’s Current A/c Vidu’s Current A/c 61,200 45,900 Radhu’s Current A/c 45,900 1,53,000 2,61,000 2,61,000

Working notes:

WN1 Calculation of Interest on Capital

Vidu=5,00,000×6/100=30,000

WN2 Calculation of Interest on Drawings

Vidu=70,000×8/100×6/12=2,800

WN3 Distribution of profit (4:3:3)

Vidu =1,53,000×3/10=45,900

Page No 2.91:

Question 52;

Kabir, Zoravar and Parul are partners sharing prohts in the ratio of 5 :3 :2.Their capitals as on 1st April, 2020 were: Kabir- `5,20,000, Zoravar-`3,20,000 and Parul - `2,00,000.

The Partnership Deed provided as follows:

(i) Kabir and Zoravar each will get salary of `24,000 p.a.

(ii) Parul will get commission of 2% of Sales.

(iii) Interest on capital is to be allowed @ 5% p.a.

(iv) Interest on Drawings is to be charged @ 5% p.a.

(v) 10% of Divisible Profit is to be transferred to General Reserve.

Sales for the year ended 31st March, 2021 were `50,00,000. Drawings by each of the partners during the year was `60,000. Net Prom for the year was `1,55,500.

Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2021.

 Profit and loss appropriation account year ended 31 March Particulars ` Particulars ` To Profit transferred Kabir  -1,60,000×5/20=40,000 Zoravar-1,60,000×4/20=32,000 Parul-1,60,000×11/20=88,000 160,000 By  Net profit By Interest on Drawings Kabir- 60,000×5/100×6/12=1,500 Zoravar-60,000×5/100×6/12=1,500 Parul-60,000×5/100×6/12=1,500 1,55,500 4,500 1,60,000 1,60,000

Working note;

 Items to be allowed Kabir Zoravar Parul Interest on Capital@5% 26,000 16,000 10,000 Salary 24,000 24,000 - Commission - - 1,00,000 Each partner getting in total 50,000 40,000 1,10,000

Ratio of appropriation = 50,000 : 40,000 : 1,10,000 = 5:4:11

Question 53:

X and Y entered into partnership on 1st April, 2018. Their capitals as on 1st April, 2020 were `2,00,000 and  `1,50,000 respectively. On 1st October, 2020, X gave ` 50,000 as loan to the firm. As per the provisions of the partnership Deed:
(i) 20% of Profits before charging interest on Drawings but after making appropriations to be transferred to General Reserve.
(ii) Interest on capital at 12% p.a. and Interest on Drawings @ 10% p.a.
(iii) X to get monthly salary of
` 5,000 and Y to get salary of  ` 22,500 per quarter.
(iv) X is entitled to a commission of 5% on sales. Sales for the year were
` 3,50,000.
(v)  Profit to be shared in the ratio of their capitals up to
`1,75,000 and balance equally.
Profit for the year ended 31st March, 2021 before allowing or charging interest was
` 4,61,000. The drawings of X and Y were  ` 1,00,000 and  ` 1,25,000 respectively.
Pass the necessary Journal entries relating to appropriation out of profit. Prepare Profit and Loss Appropriation Account and the Partners' Capital Accounts.

 Profit and Loss Appropriation Account for the year ended March 31, 2021 Dr. Cr. Particulars Amount ( `) Particulars Amount ( `) Interest on Capital A/c: Profit and Loss A/c (4,61,000 – 1,500) 4,59,500 X’s Capital A/c 24,000 Interest on Drawings A/c: Y’s Capital A/c 18,000 42,000 X’s Capital A/c 5,000 X’s Capital A/c (Commission) (3,50,000 × 5%) 17,500 Y ’s Capital A/c 6,250 11,250 Salary: X’s Capital A/c 60,000 Y’s Capital A/c 90,000 1,50,000 Reserve (WN 1) 50,000 Profit transferred to: X’s Capital A/c 1,18,125 Y’s Capital A/c 93,125 2,11,250 4,70,750 4,70,750

 Partners’ Capital Accounts Dr. Cr. Particulars X ( `) Y ( `) Particulars X ( `) Y ( `) Drawings A/c 1,00,000 1,25,000 Balance b/d 2,00,000 1,50,000 Interest on Drawings 5,000 6,250 Interest on Capital A/c 24,000 18,000 Salary A/c 60,000 90,000 Commission A/c 17,500 Balance c/d 3,14,625 2,19,875 P/L Appropriation A/c 1,18,125 93,125 4,19,625 3,51,125 4,19,625 3,51,125

Working Notes:

WN1: Calculation of Reserve

Profit before charging Interest on Drawings but after making appropriations
= 4,59,500 -
`42,000 - `17,500 - `60,000 - `90,000= 2,50,000
Reserve  = 2,50,000 × 20/100 =
` 50,000

WN2: Division of Profit

 Partners Up to ` 1,75,000 ` 36,250 (Above ` 1,75,000) Total X 1,00,000 18,125 1,18,125 Y 75,000 18,125 93,125

Page No 2.91:

Question 54: Ram and Shyam are partners in a firm sharing profits in the ratio of 3:2. On 1st April, 2020, their fixed capitals were `3,00,000 and `2,50,000 respectively. On 1st October, they decided that their total capital (Fixed) should be `6,00,000 in their profit-sharing ratio. Accordingly, they introduced extra capital or withdrew excess capital. The Partnership Deed provided for the following:

(i) Interest on capital @ 12% p.a.

(ii) Interest on Drawings @ 18% p.a.

(iii) A monthly salary of `2,000 to Ram and a quarterly salary of `4,500 to Shyam.

The drawings of Ram and Shyam were as follows:

 Particulars Ram ` Shyam ` On 31th September, 2020 On 31st December, 2020 20,000 20,000 15,000 25,000

During the year ended 31st March, 2021, the firm earned a net profit of `1,50,000. 10% of this profit was

to be transferred to General Reserve.

You are required to prepare:

(i) Profit and Loss Appropriation Account;

(Ii) Partners' Capital Accounts, and Partners' Current Accounts.

 Profit and Loss Appropriation Account Dr. Cr. Particulars Amount ` Particulars Amount ` General Reserve A/c WN1 15,000 Profit and Loss A/c (Net Profit) 1,50,000 Interest on Current: WN2 Interest on Capital: WN3 Ram’s Current A/c Shyam’s Current A/c 39,600 29,400 69,000 Ram’s Current A/c 2,700 Salary A/c Shyam’s Current A/c 2,475 5,175 Ram’s Current A/c Shyam’s Current A/c 24,000 18,000 Ram’s Current A/c Shyam’s Current A/c 17,505 11,670 29,175 1,55,175 1,55,175

 Partners’ Capital A/c Particulars Ram ` Shyam ` Particulars Ram ` Shyam ` To Bank A/c To Balance C/d - 3,60,00 10,000 2,40,000 By Balance B/d By Bank A/c 3,00,000 60,000 2,50,000 - 3,60,000 2,50,000 3,60,000 2,50,000 Partners’ Current A/c Particulars Ram ` Shyam ` Particulars Ram ` Shyam ` To Drawings A/c To Interest on Drawing A/c To Balance C/d 40,000 2,700 38,405 40,000 2,475 16,595 By Interest on Capital A/c By Salary A/c By P&L Appropriation A/c 39,600 24,000 17,505 29,400 18,000 11,670 81,105 59,070 81,105 59,070

Working Notes:

WN1

Amount of General Reserve = 1,50,000×10/100=15,000

WN2 Calculation of Interest on Capital

 Ram’s Interest on Capital for first 6 Month 3,00,000×12/100×6/12 18,000 for Second 6 Month 3,60,000×12/100×6/12 21,600 39,600 Shyam’s Interest on Capital for first 6 Month 2,50,000×12/100×6/12 15,000 for Second 6 Month 2,40,000×12/100×6/12 14,400 29,400

WN3 Calculation of Interest on Drawings

Ram’s Interest on Drawings

 Date of Drawings Drawings Time left after Drawing Product 31-9-2020 20,000 6 1,20,000 31-12-2021 20,000 3 60,000 1,80,000

Ram’s Interest on Drawings=1,80,000×18/100×1/12=2,700

Shyam’s Interest on Drawings

 Date of Drawings Drawings Time left after Drawing Product 31-9-2020 15,000 6 90,000 31-12-2021 25,000 3 75,000 1,65,000

Shyam’s Interest on Drawings =1,65,000×18/100×1/12=2,475

WN4 Distribution of profits

Ram = 29,175×3/5=17,505

Shyam = 29,175×2/5=11,670

Question 55:

Reya, Mona and Nisha shared profits in the ratio of 3 : 2 : 1. The profits for the last three year were  ` 1,40,000;  ` 84,000 and  ` 1,06,000 respectively. These profits were by mistake shared equally for all the give necessary Journal entry for the same.