# 12th Ts grewal 2021-22 Question 66 to 70 Accounting for partnership firm- fundamentals

#### Question 66:

Mohan, Vijay and Anil are partners, the balances of their Capital Accounts being ` 30,000, ` 25,000 and ` 20,000 respectively. In arriving at these amounts profit for the year ended 31st March, 2021, ` 24,000 had already been credited to partners in the proportion in which they shared profits. Their drawings were ` 5,000 (Mohan), ` 4,000 (Vijay) and `3,000 (Anil) during the year. Subsequently, the following omissions were noticed and it was decided to rectify the errors:
(a) Interest on capital @ 10% p.a.
(b) Interest on drawings: Mohan
` 250, Vijay  ` 200 and Anil  ` 150.
Make necessary corrections through a Journal entry and show your workings clearly.

 Journal Date Particulars L. F. Debit Amount ( `) Credit Amount ( `) 2020 March 31 Anil’s Capital A/c Dr. 550 To Mohan’s Capital A/c 550 (Interest on capital and interest on drawings was omitted, now adjusted)

Working Notes:

WN 1 Calculation of Capital at the beginning

 Particulars Mohan Vijay Anil Total Capital at the end 30,000 25,000 20,000 75,000 Add: Drawings 5,000 4,000 3,000 12,000 Less: Profit (1:1:1) (8,000) (8,000) (8,000) (24,000) Capital in the beginning 27,000 21,000 15,000 63,000

WN 2 Calculation of Interest on Capital

Interest on Mohan’s capital=27,000×10/100=2,700

Interest on Vijay’s capital=21,000×10/100=2,100

Interest on Anil’s capital=15,000×10/100=1,500

WN 3

 Statement Showing Adjustment Mohan Vijay Anil Total Interest on Capital to be credited 2,700 2,100 1,500 6,300 Less: Interest on Drawings (250) (200) (150) (600) Right Distribution of ` 5,700 2,450 1,900 1,350 5,700 Wrong Distribution of ` 5,700 (1 : 1 : 1) (1,900) (1,900) (1,900) (5,700) Net Effect 550 Nil (550) NIL

WN 4 Calculation of Final Profit Share of Partners

Total Corrected Profit Available for Distribution = Profit - Interest on Capital + Interest on Drawings

= 24,000 – 6,300 + 600 = ` 18,300

Corrected profti of Mohan,Vijay, Anil each =18,300×1/3=6,100

#### Question 67:

Mudit, Sudhir and Uday are partners in a firm sharing profits in the ratio of 3 : 1 : 1. Their fixed capital balances are ` 4,00,000,  ` 1,60,000 and  ` 1,20,000 respectively. Net profit for the year ended 31st March, 2018 distributed amongst the partners was  ` 1,00,000, without taking into account the following adjustments:
(a) Interest on capitals @ 2.5% p.a.;
(b) Salary to Mudit
` 18,000 p.a. and commission to Uday  ` 12,000.
(c) Mudit was allowed a commission of 6% of divisible profit after charging such commission.
Pass a rectifying Journal entry in the books of the firm. Show workings clearly.

(CBSE Sample Paper 2019)

 In the books of Mudit, Sudhir and Uday Journal Date Particulars L.F. Debit Amount ( `) Credit Amount ( `) 2019 March 31 Sudhir’s Current A/c Dr. 6,000 To Mudit’s Current A/c 1,000 To Uday’s Current A/c 5,000 (Being adjustment entry passed for rectification of errors)

Working Notes:

 Table Showing Adjustment Particulars Mudit’s Current A/c Sudhir’s Current A/c Uday’s Current A/c Firm Dr.(  `) Cr.(  `) Dr.(  `) Cr.(  `) Dr.(  `) Cr.(  `) Dr.(  `) Cr.(  `) Profits wrongly Distributed (Dr.) 60,000 20,000 20,000 1,00,000 Interest on Capital to be Provided (Cr.) 10,000 4,000 3,000 17,000 Salary to be provided (Cr.) 18,000 18,000 Commission to be provided (Cr.) 3,000 12,000 15,000 Profit correctly distributed (Cr.) 30,000 10,000 10,000 50,000 Balance to be adjusted 1,000(Cr.) 6,000(Dr.) 5,000(Cr.) NIL

 Divisible Profits = Profits before appropriation – (Interest on Capital + Salary + Uday’s Commission) = ` 1,00,000 – (17,000 + 18,000 + 12,000) =  ` 53,000 Mudit’s Commission = (Divisible Profit × Rate/ 100 + Rate) = ` (53,000 × 6/106) =  ` 3,000

#### Question 68:

Piya and Bina are partners in a firm sharing profits and losses in the ratio of 3 : 2. Following was the Balance Sheet of the firm as on 31st March, 2016:

 Liabilities ` Assets ` Capitals: Sundry Assets 1,20,000 Piya 80,000 Bina 40,000 1,20,000 1,20,000 1,20,000

The profits  ` 30,000 for the year ended 31st March, 2016 were divided between the partners without allowing interest on capital @ 12% p.a. salary to Piya @ `1,000 per month. During the year Piya withdrew `8,000 and Bina withdrew `4,000. Showing your working notes clearly, pass the necessary rectifying entry.

(Delhi 2017C)

 Journal Particular L.F. Debit Amount ( `) Credit Amount ( `) Bina’s Capital A/c Dr. 5,856 To Piya’s Capital A/c 5,856 (Adjustment made)

 Particular Piya Bina Total Interest on Capital @ 12% p.a. 8,400 3,840 (12,240) Salary 12,000 – (12,000) Profit (30,000 – 12,240 –12,000) 3,456 2,304 5,760 Right Share 23,856 6,144 (30,000) Wrong Share (18,000) (12,000) 30,000 Net Effect 5,856 (Cr.) 5,856 (Dr.) Nil

Working Notes:

 Particular Piya Bina Closing Capitals 80,000 40,000 Add: Drawings 8,000 4,000 Less: Profit Share 18,000 12,000 Opening Capital 70,000 32,000

Page No 2.94

Question 69;

Naveen, Qadir and Rajesh were partners doing an electronic goods business in Uttarakhand. After the accounts of partnership were drawn up and closed, it was discovered that interest on capital has been allowed to partners @ 6% p.a. for the years ending 31st March,2017 and 2018, although there is no provision for interest on capital in the Partnership Deed. On the other hand, Naveen and Qadir were entitled to a salary of `3,500 and `4,000 per quarter respectively, which has not been taken into consideration. Their fixed capitals were `4,00,000, `3,60,000 and `2,40,000 respectively. During the last two years they had shared the profits and losses as follows:

 Year Ended Ratio 31st March,2017 3:2:1 31stMarch,2018 5:3:2

Pass necessary adjusting entry for the above adjustments in the books of the firm on 1st April, 2018. Show your workings clearly.

(CBSE 2019)

 Date Particulars L.F. Dr. ` Cr. ` 31 March Rajesh’s  current      A/c          To Naveen ’s  current      A/c      To Qadir’s  current      A/c (Being omission of salary , wrong interest on capital credited , now profit corrected) Dr. 17,800 10,000 7,800 Total 17,800 17,800 Statement showing Adjustments Particulars Naveen Qadir Rajesh FIRM Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. 1st  Year Interest on capital Salary omitted Profit adjusted 60,000-30,000(3:2:1) 2nd  Year Interest on capital Salary omitted Profit adjusted 60,000-30,000(5:3:2) 24,000         24,000 14,000   15,000       14,000 15,000 21,600             21,600 16,000 10,000       16,000 9,000 14,400           14,400 5,000 30,000 30,000       30,000 30,000 60,000         60,000 Total 48,000 58,000 43,200 51,000 28,800 11,000 1,20,000 1,20,000 Net effect 10,000 7,800 17,800

#### Question 70:

Mannu and Shristhi are partners in a firm sharing profit in the ratio of 3 : 2. Following information is of the firm as on 31st March 2021:

 Liabilities ` Assets ` Mannu’s Capital 3,00,000 Drawings: Shristhi’s Capital 1,00,000 4,00,000 Mannu 40,000 Shristhi 20,000 60,000 Other Assets 3,40,000 4,00,000 4,00,000

Profit for the year ended 31st March, 2021 was  ` 50,000 which was divided in the agreed ratio, but interest @ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently omitted. Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.