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


Page No 2.90:

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:

Yadu- `80,000, Vidu- `70,000 and Radhu- `50,000.

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

 

Answer:

 

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

Yadu =9,00,000×6/100=54,000

Vidu=5,00,000×6/100=30,000

Radhu =4,00,000×6/100=24,000

 

WN2 Calculation of Interest on Drawings

Yadu =80,000×8/100×6/12=3,200

Vidu=70,000×8/100×6/12=2,800

Radhu =50,000×8/100×6/12=2,000

 

WN3 Distribution of profit (4:3:3)

Yadu =1,53,000×4/10=61,200

Vidu =1,53,000×3/10=45,900

Radhu =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.

 

Answer;

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

 



Page No 2.91:

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.

Answer:

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.

Answer:

 

 

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

 



Page No 2.92:

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.

Answer:

Journal

Particulars

L.F.

Debit Amount

`

Credit Amount

`

Nisha’s Capital A/c

Dr.

 

55,000

 

To Reya’s Capital A/c

 

 

55,000

(Adjustment of profit made)

 

 

 


Working Note:

Total Profits for Last 3 years = 1,40,000 + 84,000 + 1,06,000 = ` 3,30,000

Statement Showing Adjustment

Particulars

Reya

Mona

Nisha

Total

Right Distribution of Profit (3 : 2 :1)

1,65,000

1,10,000

55,000

3,30,000

Wrong Distribution of Profit (1: 1 : 1)

(1,10,000)

(1,10,000)

(1,10,000)

(3,30,000)

Net Effect

55,000

NIL

(55,000)

NIL