Double Entry Book Keeping Ts
Grewal Volume-I 2022-2023
Solutions for Class 12 Commerce Accountancy
Chapter 2 - Accounting For Partnership Firms Fundamentals
Page No 2.81:
Question 1:
In the absence of
Partnership Deed, what are the rules relation to :
(a) Salaries of partners,
(b) Interest on partners’ capitals,
(c) Interest on loan by partner,
(d) Division of profit,
(e) Interest on partners’ drawings
(f) Interest on loan to partners?
Answer:
|
|
Items
(Points) |
Provision
in the Absence of Partnership Deed |
|
(a) |
Salaries
of Partners |
No Salary will be allowed
to Partners. |
|
(b) |
Interest
on Partners’ Capitals |
No interest will be allowed
to Partners on Capital |
|
(c) |
Interest
on Loan by Partners’ |
6% p.a. Interest will be allowed
on the amount given by |
|
(d) |
Division
of Profit |
Profits
will be shared equally,
it is irrespective the |
|
(e) |
Interest
on Partners’ Drawings |
No Interest will be charged
on the Drawings of Partners |
|
(F) |
Interest
on loan to partner |
Not charged from partner |
Page No 2.81:
Question 2:
Mahesh, Ramesh and
Suresh are partners in a firm. They do not have a Partnership Deed. At the end
of the first year of the commencement of the firm, they have faced the
following problems :
(a) Mahesh wants that interest on capital should be allowed to the partners but
Ramesh and Suresh do not agree.
(b) Ramesh wants that the partners should be allowed to draw salary but Mahesh
and Suresh do not agree.
(c) Suresh wants that the loan given by him to the firm should bear interest @
10% p.a. but Mahesh and Ramesh do not agree.
(d) Mahesh and Ramesh having contributed larger amounts of capital, desire that
the profits should be divided in the ratio of their capital contribution but Suresh
does not agree.
State how you will settle these disputes if the partners approach you for
purpose.
Answer:
|
|
Disputes |
Possible Judgements |
|
(a) |
Mahesh wants that interest on capital should be allowed to the partners but Ramesh and Suresh do not agree. |
As per Partnership Act, no interest on Capital will be allowed. Reason: There is no partnership agreement among Mahesh, Ramesh and Suresh regarding interest on capital. |
|
(b) |
Ramesh wants that the partners should be allowed to draw salary but Mahesh and Suresh do not agree. |
No salary will be allowed to any partner. Reason: There is no partnership agreement. |
|
(c) |
Suresh wants that the loan given by him to the firm should bear interest @ 10% p.a. but Mahesh and Ramesh do not agree. |
Interest on partner’s loan (Suresh’s loan) will be allowed at 6% p.a. Reason: As per Partnership Act, in the absence of partnership agreement, interest on partners loan is allowed at 6% p.a. |
|
(d) |
Mahesh and Ramesh having contributed larger amounts of capital, desire that the profits should be divided in the ratio of their capital contribution but Suresh does not agree. |
Profit will be shared equally and not in the capital ratio. Reason: There is no partnership agreement. |
Page No 2.81:
Question 3:
Following
differences have arisen among P, Q and R. State who is correct in each case:
(a) P used ` 20,000 belonging to
the firm and made a profit of ` 5,000. Q and R want the amount to be
given to the firm?
(b) Q used `5,000
belonging to the firm and suffered a loss of ` 1000. He wants
the firm to bear the loss?
(c) P and Q want to purchase goods from A Ltd., R does not agree?
(d) Q and R want to admit C as partner, P does not agree?
(e) R had given loan of `1,00,000 to firm and demands interest @ 10% p.a. P and Q do not want to pay the interest.
Answer:
(a) P is bound to pay ` 20,000 together with profit of ` 5,000 to the firm because this amount belongs to the firm.
Explanation: As per Principal and Agent relationship, P is principal as well as agent to the firm and to Q and R. As per this rule, any profit earned by an agent (P) by using the firm’s property is attributable to the firm.
(b) Q is liable to pay ` 5,000 to the firm. As per the Partnership Act, 1932, every partner of a partnership firm is liable to the firm for any loss caused by his/her willful negligence.
Explanation: Here Q is solely responsible for the loss of ` 1,000 because he used the property of the firm and also represented himself as a principal rather than an agent to the other partners and to the firm.
(c) P and Q may buy goods from A Ltd.
Explanation: As per Partnership Act, 1932, a partner has a right to buy and sell goods without consulting the other partners unless a Public Notice has been given by the partnership firm to restrict the partners to buy and sell.
(d) C will not be admitted because one of the partners P has not agreed to admit C.
(e) P,Q and R are not correct
Explanation: As per Partnership Act, a new partner cannot be admitted into a firm unless all the existing partners agree on the same decision. In other words, a new partner can be admitted in a partnership firm with the consent of all the existing partners.
Page No 2.81:
Question 4: Bose, Sarkar and Chatterjee are partners in a firm and do not have a Partnership Deed. Bose introduced
further capital of `5,00,000 on 1st October, 2021. Whereas Chatterjee took a loan of ` 50,000 from the firm
on 1st October, 2021. Disputes have arisen among them on the following issues:
(a) Bose demands interest 10% p.a. on ` 5,00,000 being his extra capital.
(b) Sarkar desires that his son Deep should be admitted as partner and he will give him half of his share
Bose and Chatterjee do not agree.
(c) Bose and Sarkar are of the view that Chatterjee should be charged interest on loan from the firm at
the lending rate of the banks, which is 12% p.a.
(d) Sarkar has withdrawn `50,000 from the firm for his personal use. Bose and Chatterjee are of the view
that Sarkar should be charged interest @ 10% p.a.
You are required to give solution to each issue of dispute.
Answer:
In the absence of Partnership Deed, the provisions of Indian Partnership Act, 1932 will apply as follows;
(a) Interest will not be allowed on extra capital introduced by Bose,
(b) Deep cannot be admitted as Bose and Chatterjee don't agree, no partner has right to admit any one as a partner,
(c) Interest will not be charged from Chatterjee as rate of interest was not agreed.
(d) Interest on drawings will not be charged on Sarkar’s drawings.
Page No 2.82:
Question 5:
A and B are
partners from 1st April, 2021, without a Partnership Deed and they introduced
capitals of `35,000 and `20,000 respectively. On 1st
October, 2021, A advanced loan of `8,000
to the firm without any agreement as to interest. The profit and Loss Account
for the year ended 31st March, 2022 shows a profit of `
15,000 but the partners cannot agree on payment of interest and on the basis of
division of profits.
You are required to divide the profits between them giving reasons for your
method.
Answer:
|
Profit and Loss Account for the year ended March 31, 2022 |
||||
|
Dr. |
|
|
Cr. |
|
|
Particulars |
( `) |
Particulars |
( `) |
|
|
Interest on A’s Loan |
240 |
Profit (before Interest) |
15,000 |
|
|
Profit transferred to: |
14,760 |
|
|
|
|
(Net Profit transferred to P&L Appropriation a/c) |
|
|
|
|
|
|
|
|
|
|
|
|
15,000 |
|
15,000 |
|
|
|
|
|
|
|
|
Profit and Loss Account for the year ended March 31, 2022 |
||||
|
Dr. |
|
|
Cr. |
|
|
Particulars |
( `) |
Particulars |
( `) |
|
|
|
Profit (Net Profit transferred from P&L a/c) |
14,760 |
||
|
Profit transferred to: |
|
|
|
|
|
A’s Capital A/c |
7,380 |
|
|
|
|
B’s Capital A/c |
7,380 |
14,760 |
|
|
|
|
15,000 |
|
15,000 |
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Interest on Loan
As per the Partnership Act, if there is no partnership agreement regarding rate of interest on loan, it is provided at 6% p.a.
Amount of Loan = ` 8,000
Time Period (from October 01 to March 31) = 6 months
Interest on A' s
loan=8,000×6/100×6/12=240
WN 2 Calculation of Profit Share of each Partner
In the absence of partnership deed, profits of a firm are distributed equally among all the partners.
Profit after Interest on A’s loan = 15,000- ` 240 = ` 14,760
Profit of A and B=14,760×1/2=7380
Ts Grewal Solution 2022-2023
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Class 12 / Volume – I
Chapter 1 – Accounting For Partnership Firms Fundamentals
Question No. 1 To 5
Question No. 5 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55
Question No. 56 To 60
Question No. 61 To 65
Question No. 66 To 70
Question No. 71 To 75
Question No. 76 To 80
Question No. 81 To 85
Question No. 86 To 88
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