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12th | Accounting For Partnership Firms Fundamentals | Question No. 21 to 25 | Ts Grewal Solution 2022-2023

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

Question 21:


Simran and Reema are partners sharing profits in the ratio of 3 : 2. Their capitals as on 31st March, 2021 were  ` 2,00,000 each whereas Current Accounts had balances of  ` 50,000 and  ` 25,000 respectively interest is to be allowed @ 5% p.a. on balances in Capital Accounts. The firm earned net profit of  ` 3,00,000 for the year ended 31st March 2022.
Pass the Journal entries for interest on capital and distribution of profit. Also prepare Profit and Loss Appropriation Account for the year.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

 

Profit & Loss Appropriation A/c

Dr.

 

20,000

 

 

    To Simran’s Current A/c

 

 

 

10,000

 

    To Reema’s Current A/c

 

 

 

10,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

 

 

 

 

 

 

Profit & Loss Appropriation A/c

 

 

2,80,000

 

 

    To Simran’s Current A/c

 

 

 

1,68,000

 

    To Reema’s Current A/c

 

 

 

1,12,000

 

(Profit transferred to Partners’ Current A/c)

 

 

 

 

 

 

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended 31 March 2022

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital A/c:

 

Profit and Loss A/c

3,00,000

Simran’s Current  A/c

10,000

 

 

 

Reema’s Current  A/c

10,000

20,000

 

 

Profit transferred to:

 

 

 

Simran’s Current  A/c

1,68,000

 

 

 

Reema’s Current  A/c

1,12,000

2,80,000

 

 

 

3,00,000

 

3,00,000

 

 

 

 

 

Working Notes:

WN1: Calculation of Interest on Capital

Simran's Interest on Capital = 2,00,000×5÷100=
` 10,000

Reema's Interest on Capital = 2,00,000×5÷100=` 10,000

 

Question 22:


Anita and Ankita are partners sharing profits equally. Their capitals, maintained following Fluctuating Capital Accounts Method, as on 31st March, 2021 were  ` 5,00,000 and  ` 4,00,000 respectively. Partnership Deed provided to allow interest on capital @ 10% p.a. The firm earned net profit of  ` 2,00,000 for the year ended 31st March, 2022.
Pass the Journal entry for interest on capital.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2022

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

90,000

 

 

    To Anita’s Capital A/c

 

 

 

50,000

 

    To Ankita’s Capital A/c

 

 

 

40,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

Working Notes:

WN1: Calculation of Interest on Capital

Anita's Interest on Capital = 5,00,000×10÷100=
` 50,000

Ankita's Interest on Capital = 4,00,000×10÷100=` 40,000

 

Question 23:


Ashish and Aakash are partners sharing profit in the ratio of 3 : 2. Their Capital Accounts showed a credit balance of  ` 5,00,000 and  ` 6,00,000 respectively as on 31st March, 2022 after debit of drawings during the year of  ` 1,50,000 and  ` 1,00,000 respectively. Net profit for the year ended 31st March, 2022 was ` 5,00,000. Interest on capital is to be allowed @ 10% p.a.
Pass the Journal entry for interest on capital and prepare Profit and Loss Appropriation Account.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2022

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

1,35,000

 

 

    To Ashish’s Capital A/c

 

 

 

65,000

 

    To Aakash’s Capital A/c

 

 

 

70,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

 

 

 

3,65,000

 

 

Profit & Loss Appropriation A/c

 

 

 

2,19,000

 

    To Ashish’s Capital A/c

 

 

 

1,46,000

 

    To Akash’s Capital A/c

 

 

 

 

 

(Profit transferred to Partners’ Capital A/c)

 

 

 

 

 

 

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended 31 March 2022

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital A/c:

 

Profit and Loss A/c

5,00,000

Ashish

65,000

 

 

 

Aakash

70,000

1,35,000

 

 

Profit transferred to:

 

 

 

Ashish’s Capital  A/c

2,19,000

 

 

 

Aakash’s Capital  A/c

1,46,000

3,65,000

 

 

 

5,00,000

 

5,00,000

 

 

 

 

 

Working Notes:

WN1: Calculation of Opening Capital:

Particulars

Ashish

Aakash

Capital at the end

5,00,000

6,00,000

Add: Drawings made

1,50,000

1,00,000

Capital at the beginning

6,50,000

7,00,000

 

WN2: Calculation of Interest on Capital

Ashish's Interest on Capital = 6,50,000×10/100=
` 65,000

Aakash's Interest on Capital = 7,00,000×10/100=` 70,000

 

Question 24:


Naresh and Sukesh are partners with capitals of  ` 3,00,000 each as on 31st March, 2022. Naresh had withdrawn  ` 50,000 against capital on 1st October, 2021 and also  ` 1,00,000 besides the drawings against capital. Sukesh also had drawings of  ` 1,00,000.
Interest on capital is to be allowed @ 10% p.a.
Net profit for the year was
 ` 2,00,000, which is yet to be distributed.
Pass the Journal entries for interest on capital and distribution of profit.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2022

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

82,500

 

 

    To Naresh’s Capital A/c

 

 

 

42,500

 

    To Sukesh’s Capital A/c

 

 

 

40,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

 

 

 

 

 

 

Profit & Loss Appropriation A/c

Dr.

 

1,17,500

 

 

    To Naresh’s Capital A/c

 

 

 

58,750

 

    To Sukesh’s Capital A/c

 

 

 

58,750

 

(Profit transferred to Partners’ Capital A/c)

 

 

 

 

             

 

 

 

 

 

 

Working Notes:

WN1: Calculation of Opening Capital:

Particulars

Naresh

Sukesh

Capital at the end

3,00,000

3,00,000

Add: Drawings out of capital

50,000

-

Add: Drawings against profit

1,00,000

1,00,000

Capital at the beginning

4,50,000

4,00,000

 

WN2: Calculation of Interest on Capital

Naresh=(4,50,000×10×6/100×12)+(4,00,000×10×6/100×12)=` 42,500

Sukesh=4,00,000×10/100=` 40,000
 

Question 25:


On 1st April, 2013, Jay and Vijay entered into partnership for supplying laboratory equipments to government schools situated in remote and backward areas. They contributed capitals of  ` 80,000 and  ` 50,000 respectively and agreed to share the profits in the ratio of 3 : 2. The partnership Deed provided that interest on capital shall be allowed at 9% per annum. During the year the firm earned a profit of  ` 7,800. Showing your calculations cleary, prepare 'Profit and Loss Appropriation Account' of Jay and Vijay for the year ended 31st March, 2014.

Answer:


Profit and Loss Appropriation Account

for the year ended March 2014

Dr.

 

Cr.

Particulars

`

Particulars

`

Interest on Capital A/c:

 

Profit and Loss A/c

7,800

Jay' s Capital

4,800

 

 

 

Vijay' s Capital

3,000

7,800

 

 

 

 

 

 

 

7,800

 

7,800

 

 

 

 

Working Notes:

WN1: Calculation of Interest on Capital

Interest on Jay' s Capital=80,000×9/100=7,200

Interest on Vijay' s Capital=50,000×9/100=4,500

Total interest = 7,200+4,500 =11,700

 

WN2: Calculation of Proportionate Interest on Capital

Jay' s proportion of interest =7,800×7,200/11,700=4,800

Vijay's proportion of interest =7,800×4,500/11,700=3,000

Note: Interest on capital is to be treated as an appropriation of profits and is to be provided to the extent of available profits i.e. ` 7,800.

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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