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

Page No 2.93:

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.
Pass necessary adjustment entry.

Answer:

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

Page No 2.93:

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.

Answer:

Particulars

`

Ram’s Capital A/c Dr,

Mohan’s Capital A/c Dr,

To Sohan’s Capital A/c

(Being interest on Drawing Charged Wrongly, now Rectified)

180

630

810

Working notes:

WN1:

Table of Adjustments

	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

Page No 2.93:

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 Both the amounts were withdrawn on 1st January 2016.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.

Answer:

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)

Answer;

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
Particulars	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

Page No 2.93:

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.

Pass necessary adjustment entry.

Answer:

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.