# 12th | Ts grewal 2022-2023 Question 76 to 80 | Fundamental Accounting for Partnership firm

Double Entry Book Keeping Ts Grewal Vol. 1 2019 Solutions for Class 12 Commerce ACCOUNTANCY Chapter 2 - Accounting For Partnership Firms Fundamentals

#### Question 76:

A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his minimum share of profit in any given year would be at least  ` 5,000. Deficiency, if any, would be borne by A and B equally. Profit for the year ended 31st March 2022 was  ` 40,000.
Pass necessary Journal entries in the books of the firm.

 Profit and Loss Appropriation Account for the year ended 2022 Dr. Cr. Particulars ( `) Particulars ( `) Profit transferred to: Profit and Loss A/c (Net Profit) 40,000 A’s Capital A/c 19,500 B’s Capital A/c 15,500 C’s Capital A/c 5,000 40,000 40,000 40,000

Working Notes:

Profit for the year = ` 40,000

Profit sharing ratio = 5 : 4 : 1

C is given a guarantee of minimum profit of ` 5,000

A’s profit share =40,000×5/10=20,000

B’s profit share =40,000×4/10=16,000

C’s profit share =40,000×1/10=4,000

Deficiency in C’s share = 5,000 ` 4,000 = ` 1,000

This deficiency is to be borne by A and B equally.

Deficiency is to be borne by A=1000×1/2=500

Deficiency is to be borne by B=1000×1/2=500

Therefore,

Final Profit Share of A = 20,000 - 500 = ` 19,500

Final Profit Share of B = 16,000 -500 = ` 15,500

Final Profit Share of C = 4,000 + 1,000 = ` 5,000

#### Question 77:

A, B and C are partners in a firm. Their profit-sharing ratio is 2 : 2 : 1. C is guaranteed a minimum of  ` 1,00,000 as share of profit every year. Any deficiency arising on that amount shall be met by B. The profits for the two years ended 31st March, 2021 and 2022 were ` 4,00,000 and  ` 6,00,000 respectively. Prepare Profit and Loss Appropriation Account for the two years.

 Profit and Loss Appropriation Account for the year ended 31st March, 2021 Dr. Cr. Particulars ( `) Particulars ( `) Profit transferred to: (WN 1) Profit and Loss A/c (Net Profit) 4.00,000 A’s Capital A/c 1,60,000 B’s Capital A/c 1,40,000 C’s Capital A/c 1,00,000 4,00,000 4,00,000 4,00,000

 Profit and Loss Appropriation Account for the year ended 31st March, 2022 Dr. Cr. Particulars ( `) Particulars ( `) Profit transferred to: Profit and Loss A/c (Net Profit) 60,000 A’s Capital A/c 24,000 B’s Capital A/c 24,000 C’s Capital A/c 12,000 60,000 60,000 60,000

Working Notes:

WN 1 Distribution of Profit for the year 2020-21

Profit for 2021 = ` 4,00,000

Profit sharing ratio = 2 : 2 : 1

C is given a guarantee of minimum profit of ` 1,00,000

A’s profit share =4,00,000×2/5=1,60,000

B’s profit share =4,00,000×2/5=1,60,000

C’s profit share =4,00,000×1/5=80,000

Deficiency in C’s Profit Share = 1,00,000 - ` 80,000 = ` 20,000

This deficiency is to be borne by B.

Therefore,

Final Profit Share of A = 1,60,000

Final Profit Share of B = 1,60,000 - ` 20,000 = ` 1,40,000

Final Profit Share of C = 80,000 + 20,000 = ` 1,00,000

WN 2 Distribution of Profit for the year 2021-22

Profit for 2022 = ` 6,00,000

Profit sharing ratio = 2 : 2 : 1

C is given a guarantee of minimum profit of ` 1,00,000

A’s profit share =6,00,000×2/5=2,40,000

B’s profit share =6,00,000×2/5=2,40,000

C’s profit share =6,00,000×1/5=1,20,000

Question 78: Atul, Bipul and Charu are partners sharing profits equally. Bipul is guaranteed minimum profit of

`2,00,000 per annum. Salary is payable to Bipul of `10,000 per month. Net Profit for the year ended 31st March, 2022 is ` 6,60,000.

Prepare Profit & Loss Appropriation Account for the year.

 Profit & Loss Appropriation A/c Particulars ` Particulars ` To Bipul’s Capital A/C (Salary) 1,20,000 By Profit and loss a/c 6,60,000 To Profit transferred to: (Profit) Atul’s Capital A/c 1,70,000 Bipul’s Capital A/c 2,00,000 Charu’s Capital A/c 1,70,000 6,60,000, 6,60,000,

Working Notes:

Profit after Bipul’s salary = 6,60,000 -1,20,000

Divisible Profit = 5,40,000

Share of Profits mas per profit sharing ratio 1:1:1

= 5,40,000÷3= 1,80,000

Guarantee of profit = 2,00,000

Deficiency of profit =2,00,000-1,80,000= 20,000

Deficiency of profit will be adjusted by Atul and Charu in 1:1

= 20,000÷2=10,000

 Adjustment Table of Profit Partner Atul Bipul Charu Share of Profits mas per profit sharing ratio 1:1:1 1,80,000 1,80,000 1,80,000 Adjustment of Profit (-) 10,000 (+) 20,000 (-) 10,000 Final share of profit 1,70,000 2,00,000 1,70,000

Question 79:  Parul, Prerna and Kaushal are partners sharing profits equally. Parul is guaranteed minimum annual profit of ` 2,00,000. Kaushal is to get Commission@ 5% of Net Sales and the commission is determined at `50,000.

Net Profit for the year ended 31st March, 2022 is ` 2,50,000.

Prepare Profit & Loss Appropriation Account for the year.

 Profit & Loss Appropriation A/c Particulars ` Particulars ` To Kaushal’s Capital A/c 50,000 By Profit and loss a/c 2,50,000 (commission) (Profit) To Parul’s Capital A/c 2,00,000 (Profit transferred) 2,50,000 2,50,000

Working Notes:

Share of each partner 2,00,000 ÷ 3 = 66,666.67

Note: Share of each partner is less than guarantee but divisible profit is equal to guarantee, hence whole divisible profit should be credited to parul’s Capital A/c

Question 80: Nimrat, Maira and Kabir are partners sharing profits in the ratio of 2:2:1.Nimrat is guaranteed minimum profit of ` 1,60,000 per annum. Net Profit for the year ended 31st March, 2022 is ` 1,00,000.

Prepare Profit & Loss Appropriation Account for the year.

 Profit & Loss Appropriation A/c Particulars ` Particulars ` To Nimrat’s Capital A/c 1,60,000 By Profit and loss a/c 1,00,000 (Profit transferred) (Profit) By Loss transferred to; Maira’s Capital A/c 40,000 Kabir’s Capital A/c 20,000 60,000 2,50,000 2,50,000

Note: Loss will be borne by Maira and Kabir in  2:1, Since Nimrat is guaranteed minimum share of profit of 1,60,000.

Maira = 60,000×2÷3=40,000

Kabir = 60,000×1÷3=20,000