12th Ts grewal 2021-22 Question 61 to 65 Accounting for partnership firm- fundamentals

Question 61:

Profit earned by a partnership firm for the year ended 31st March, 2021 were distributed equally between the partners – Pankaj and Anu – without allowing interest on capital. Interest due on capital was Pankaj  ` 3,000 and Anu ` 1,000.

 Journal Date Particulars L.F. Debit Amount ( `) Credit Amount ( `) Anu’s  Capital A/c Dr. 1,000 To Pankaj’s Capital A/c 1,000 (Adjustment of omission of Interest on Capital)

Working Note:

 Statement Showing Adjustment Particulars Pankaj Anu Total Interest on Capital to be credited 3,000 1,000 4,000 Profit wrongly distributed equally to be debited (2,000) (2,000) (4,000) Net Effect 1,000 (Cr.) 1,000 (Dr.) NIL

Question 62: Ram, Mohan and Sohan were partners sharing profits in the ratio of 2:1:1. Ram withdrew `3,000 every month and Mohan withdrew `4,000 every month. Interest on drawings @ 6% p.a. was charged, whereas the partnership deed was silent about interest on drawings.

Showing your working clearly, pass the necessary adjustment entry to rectify the error.

810

Working notes:

WN1:

 Ram Mohan Sohan Total Interest on Drawing Wrongly Debited 1,080 - 1,440 2,520 Profits to be credited 1,260 630 630 2,520 Amount to adjusted 180(Dr.) 630(Dr.) 810(Cr.)

WN2: Interest on Drawing Wrongly Debited

Ram’s Interest on Drawing= 36,000×6/100×6/12=1,080

Sohan’s Interest on Drawing= 48,000×6/100×6/12=1,440

WN3: Profits to be credited (1,080+1,440=2,520)

Ram =  2,520×2/4=1,260

Mohan =2,520×1/4=630

Sohan = =2,520×1/4=630

Question 63:

Mita and Usha are partners in a firm sharing profits in the ratio of 2 : 3. Their Capital Accounts as on 1st April, 2015 showed balances of  `1,40,000 and  `1,20,000 respectively. The drawings of Mita and Usha during the year 2015-16 were  ` 32,000 and  ` 24,000 respectively. Both the amounts were withdrawn on 1st January 2016. It was subsequently found that the following items had been omitted while preparing the final accounts for the year ended 31st March, 2016:
(a) Interest on Capital @ 6% p.a.
(b) Interest on Drawings @ 6% p.a.
(c) Mita was entitled to a commission of
`8,000 for the whole year.
Showing your working clearly, pass a rectifying entry in the books of the firm.

 Journal Particular L.F. Debit Amount ( `) Credit Amount ( `) Usha’s Capital A/c Dr. 6,816 To Mita’s Capital A/c 6,816 (Adjustment made)

 Particular Mita Usha Total Interest on Capital @ 6% p.a. 8,400 7,200 (15,600) Interest on Drawings @ 6% p.a. (480) (360) 840 Commission 8,000 – (8,000) Right Share 15,920 6,840 (22,760) Wrong Share (9,104) (13,656) 22,760 Net Effect 6,816 (Cr.) 6,816 (Dr.) Nil

Page No 2.93:

Question 64;

A, B and C were partners. Their fixed capitals were `60,000, `40,000 and `20,000 respectively. Their profit sharing ratio was 2 :2 : 1. According to the Partnership Deed, they were entitled to interest on capital @ 5% pa. In addition, B was also entitled to draw a salary of `1,500 per month. C was entitled to a commission of 5% on the profits after charging the interest on capital, but before charging the salary payable to B. The net profits for the year, `80,000, were distributed in the ratio of their capitals without providing for any of the above adjustments. Showing your workings clearly, pass the necessary adjustment entry.  (CBSE 2019)

 Date Particulars L.F. Dr. ` Cr. ` 31 March A’s  current      A/c          To B ’s  current      A/      To C’s  current      A/ (Being omission of salary , interest on capital , commission now profit corrected) Dr. 16,080 14,253 1,827 16,080 16,080 Working note;  Correct Profit and loss appropriation account year ended 31 March Particulars ` Particulars ` To C’s Salary B=1500×12=18,000 To Commission (C=80,000-6,000×5/100)   To Interest on capital A-60,000×5/100=3,000 B-40,000×5/100=2,000 C-20,000×5/100=1,000 To profit A-52,300×2/5=20,920 B -52,300×2/5=20,920 C -52,300×1/5=10,460 18,000   3,700         6,000       52,300 By  Net profit 80,000 80,000 80,000

 Statement showing Adjustments Particulars A B C FIRM Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Interest on capital Salary omitted Commission omitted Correct Profit omitted Wrong Profit credited 40,000 3,000     20,920 26,667 2,000 18,000   20,920 13,333 1,000   3,700 10,460 6,000 18,000 3,700 52,300 80,000 Total 40,000 23,920 26,667 40,920 13,333 15,160 80,000 80,000 Net effect 16,080 14,253 1,827 Nil

Question 65:

On 31st March, 2021, after the closing of the accounts, the Capital Accounts of P, Q and R stood in the books of the firm at  ` 40,000;  ` 30,000 and  ` 20,000 respectively. Subsequently, it was noticed that interest on capital @ 5% had been omitted. Profit for the year ended 31st March, 2021 was  ` 60,000 and the partners' drawings had been P  ` 10,000, Q ` 7,500 and R  ` 4,500. Profit-sharing ratio of P, Q and R is 3 : 2 : 1.

 Journal Date Particulars L.F. Debit Amount ( `) Credit Amount ( `) 2020 Mar.31 P’s Current A/c Dr. 300 To Q’s Capital A/c 8 To R’s Capital A/c 292 (Interest on Capital was omitted, now adjusted)

Working Notes:

WN 1 Calculation of Capital at the beginning (as on April 01, 2019)

 Particulars P Q R Capital as on March 31, 2017 (Closing) 40,000 30,000 20,000 Add: Drawings 10,000 7,500 4,500 Less: Profit ` 60,000 (3:2:1) (30,000) (20,000) (10,000) Capital as on April 01, 2016 (Opening) 20,000 17,500 14,500

WN 2 Calculation of Interest on Capital

Interest on P’s capital=20,000×5/100=1000

Interest on Q’s capital=17,500×5/100=875
Interest on R’s capital=14,500×5/100=725
WN 3

 Statement Showing Adjustment Particulars P Q R Total Interest on Capital (to be credited) 1,000 875 725 2,600 For sharing above Loss (3:2:1) (1,300) (867) (433) (2,600) Net Effect (300) 8 292 NIL Dr. Cr. Cr.