12th | Accounting For Partnership Firms Fundamentals | Question No. 31 to 35 | Ts Grewal Solution 2022-2023

Shiv, Mohan and Gopal are partners sharing profits and losses in the ratio of 2 : 2 : 1 respectively. Shiv is entitled to a commission of 10% on the net profit. Net profit for the year is  ` 1,10,000.
Determine the amount of commission payable to Shiv.

Net Profit before charging commission = ` 1,10,000

Commission to Shiv = 10% of on Net Profit before charging such commission  

Partner' s Commission = (Net profit×rate of commission)/100

Shiv ' s Commission =(1,10,000×10)/100=11,000

 

Abha, Bobby and Vineet are partners sharing profits and losses equally. As per Partnership Deed, Vineet is entitled to a commission of 10% on the net profit after charging such commission. The net profit before charging commission is `2,20,000.
Determine the amount of commission payable to Vineet.

Net Profit before charging Commission = ` 2,20,000

Commission to Vineet = 10% of on Net Profit after charging such commission

Partner' s Commission = (Net profit×Rate of commission)/(100+Rate of commission)

Vineet's Commission =(2,20,000×10)/(100+10)=20,000

 

A, B, C, and D are partners in a firm sharing profits as 4 : 3 : 2 : 1 respectively. It earned a profit of `1,80,000 for the year ended 31st March, 2022. As per the Partnership Deed, they are to charge a commission @ 20% of the profit after charging such commission which they will share as 2 : 3 : 2 : 3. You are required to show appropriation of profits among the partners.

Profit and Loss Appropriation Account for the year ended March 31, 2022
Dr.					Cr.
Particulars			`		Particulars		`
Partners’ Commission:					Profit and Loss A/c (Net Profit)		1,80,000
A’s Capital A/c	6,000
B’s Capital A/c	9,000
C’s Capital A/c	6,000
D’s Capital A/c	9,000	30,000
Profit transferred to:
A’s Capital A/c	60,000
B’s Capital A/c	45,000
C’s Capital A/c	30,000
D’s Capital A/c	15,000	1,50,000
			1,80,000				1,80,000

Working Notes:

WN 1 Calculation of Partners’ Commission

Partners’ Commission = 20% on Net Profit after charging such commission

Partners' Commission = (Net profit×Rate of commission)/(100+Rate of commission)

Partners' Commission = (1,80,000×20)/(100+20)=30,000

This commission is to be shared by the partners in the ratio of 2 : 3 : 2 : 3

A' s Commission =(30,000×2)/10=6,000

B' s Commission =(30,000×3)/10=9,000

C' s Commission =(30,000×2)/10=6,000

D's Commission =(30,000×3)/10=9,000

 

 

WN 2 Calculation of Profit Share of each Partner

Profit available for Distribution = 1,80,000 ` 30,000 = ` 1,50,000

Profit sharing ratio = 4 : 3 : 2 : 1

 

A' s Profit share=(1,50,000×4)/10=60,000

B' s Profit share=(1,50,000×3)/10=45,000

C' s Profit share=(1,50,000×2)/10=30,000

D's Profit share=(1,50,000×1)/10=15,000

 

X and Y are partners in a firm. X is entitled to a salary of  ` 10,000 per month and commission of 10% of the net profit after partners' salaries but before charging commission. Y is entitled to a salary of  ` 25,000 p.a. and commission of 10% of the net profit after charging all commission and partners' salaries. Net profit before providing for partners' salaries and commission for the year ended 31st March, 2022 was ` 4,20,000. Show distribution of profit.

Profit and Loss Appropriation Account for the year ended March 31, 2022
Dr.				Cr.
Particulars			( `)	Particulars	( `)
Partners’ Salary:				Profit and Loss A/c (Net Profit)	4,20,000
X (10,000 × 12)	1,20,000
Y	25,000		1,45,000
Partners’ Commission:
X’s Capital A/c		27,500
Y’s Capital A/c		22,500	50,000
Profit transferred to:
X’s Capital A/c	1,12,500
Y’s Capital A/c	1,12,500		2,25,000
			4,20,000		4,20,000

Working Notes:

WN 1 Calculation of Commission

Commission to X = 10% of Net Profit after partners’ salaries but before charging such commission

Profit after Partners’ Salaries = 4,20,000 ` 1,45,000 =  ` 2,75,000

Commission to X	= Profit after Partners’ Salaries × Rate of commission / 100
	= 2,75,000 ×  10 /100= 27,500

Commission to Y = 10% of Net Profit after charging Commission and Partners’ Salaries

Profit after commission and partners’ salaries = 4,20,000- ` 1,45,000- ` 27,500 =  ` 2,47,500

Commission to Y	= Profit after commission and partners’ salaries × Rate of commission / 100+Rate
	= 2,45,500 ×  10 /100+10= 22,500

WN 2 Calculation of Profit Share of each Partner

Profit available for distribution = 4,20,000- ` 1,45,000 -` 50,000 =  `2,25,000

Profit sharing ratio = 1 : 1

 Profit share of each X and Y = 2,25,000× 1/2

 

Ram and Mohan, two partners, drew for their personal use `1,20,000 and  ` 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?

In this question, date of drawings made by the partners is not given. Therefore, interest on drawings is calculated on average basis for a period of six months.

Interest on Ram’s Drawings = 1,20,000× 6/ 100×6/12=3,600

Interest on Mohan’s Drawings = 80,000× 6/ 100×6/12=2,400