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12th | Accounting For Partnership Firms Fundamentals | Question No.  56 To 60 | 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 56:


Azad and Benny are equal partners. Their capitals are  ` 40,000 and  ` 80,000 respectively. After the accounts for the year had been prepared, it was noticed that interest @ 5% p.a. as provided in the Partnership Deed was not credited to their Capital Accounts before distribution of profits. It is decided to pass an adjustment entry in the beginning of the next year. Record the necessary Journal entry.

Answer:


Interest on Capital
 

Azad

=

40,000 ×

5100

=  ` 2,000

Benny

=

80,000 ×

5100

=  ` 4,000


Adjustment of Profit

 

Azad

Benny

 

Total

Interest on Capital

2,000

4,000

=

6,000

  Less: Wrong distribution of Profit ` 6,000 (1: 1)

(3,000)

(3,000)

=

(6,000)

Adjusted Profit

(1,000)

(1,000)

=

NIL


Adjusting Journal Entry 

Date

Particular

L.F

Debit Amount

( `)

Credit Amount
(
`)

 

Azad's Current A/c

Dr.

 

1,000

 

 

To Benny's Current A/c

 

 

 

1,000

 

(Adjustment of profit made)

 

 

 

 

 

Question 57:


Ram, Mohan and Sohan sharing profits and losses equally have capitals of  ` 1,20,000,  ` 90,000 and  ` 60,000 respectively. For the year ended 31st March, 2022, interest was credited to them @ 6% instead of 5%.
Give adjustment Journal entry.

Answer:


Journal

Particulars

L. F.

Debit

( `)

Credit

( `)

Ram’s Capital A/c

Dr.

 

300

 

To Sohan’s Capital A/c

 

 

300

(Interest on Capital was wrongly credited, now adjusted)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital at 6% p.a.

Interest on Ram’s capital=1,20,000×6/100=7,200

Interest on Mohan’s capital=90,000×6/100=5,400

Interest on Sohan’s capital=60,000×6/100=3,600

 

WN 2 Calculation of Interest on Capital at 5% p.a.

Interest on Ram’s capital=1,20,000×5/100=6,000

Interest on Mohan’s capital=90,000×5/100=4,500

Interest on Sohan’s capital=60,000×5/100=3,000

 

WN 3

Statement Showing Adjustment

Particulars

Ram

Mohan

Sohan

Total

Interest on Capital wrongly credited at 6% p.a. reversed

(7,200)

(5,400)

(3,600)

(16,200)

Interest on Capital credited at 5% p.a.

6,000

4,500

3,000

13,500

Wrong Distribution

(1,200)

(900)

(600)

(2,700)

Right Distribution of ` 2,700 (1:1:1)

900

900

900

(2,700)

Net Effect

(300)

NIL

300

NIL

 

 

 

 

 

 

Question 58:


Ram, Shyam and Mohan were partners in a firm sharing profits and losses in the ratio of 2 : 1 : 2. Their capitals were fixed at  ` 3,00,000,  ` 1,00,000,  ` 2,00,000. For the year ended 31st March, 2022, interest on capital was credited to them @ 9% instead of 10% p.a. The profit for the year before charging interest was  ` 2,50,000.
Show your working notes clearly and pass necessary adjustment entry.

Answer:


 

Journal

Date

Particulars

L.F.

Debit

( `)

Credit

( `)

2022
March 31


Shyam’s Current A/c


Dr.

 


200

 

 

Mohan’s Current A/c

Dr.

 

400

 

 

To Ram’s Current A/c

 

 

600

 

(Interest on Capital adjusted)

 

 

 

 

 

 

 

 

Working Notes:

 

WN 1 Calculation of Interest on Capital 10% p.a.

Interest on Ram’s capital=3,00,000×10/100=30,000

Interest on Shyam’s capital=1,00,000×10/100=10,000

Interest on Mohan’s capital=2,00,000×10/100=20,000

 

WN 2 Calculation of Interest on Capital 9% p.a.

Interest on Ram’s capital=3,00,000×9/100=2,7000

Interest on Shyam’s capital=1,00,000×9/100=9,000

Interest on Mohan’s capital=2,00,000×9/100=18,000

 

WN 3

Statement Showing Adjustment

Particulars

Ram

Shyam

Mohan

Total

Interest on Capital credited at 10% p.a.

30,000

10,000

20,000

60,000

Interest on Capital wrongly credited at 9% p.a. reversed

(27,000)

(9,000)

(18,000)

(54,000)

Right distribution

3,000

1,000

2,000

6,000

Wrong distribution of ` 6,000 (2 : 1 : 2)

(2,400)

(1,200)

(2,400)

(6,000)

Net Effect

600

(200)

(400)

NIL

 

 

 

 

 

 

Question 59:


Simrat and Bir are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2022 after closing the books of account, their Capital Accounts stood at  ` 4,80,000 and  ` 6,00,000 respectively. On 1st May, 2021, Simrat introduced an additional capital of  ` 1,20,000 and Bir withdrew  ` 60,000 from his capital.On 1st October, 2021, Simrat withdrew  ` 2,40,000 from her capital and Bir introduced  ` 3,00,000. Interest on capital is allowed at 6% p.a. Subsequently, it was noticed that interest on capital @ 6% p.a. had been omitted. Profit for the year ended 31st March, 2022 amounted to  ` 2,40,000 and the partners' drawings had been: Simrat –  ` 1,20,000 and Bir –  ` 60,000. Compute the interest on capital if the capitals are (a) fixed, and (b) fluctuating.

Answer:


Case 1: If Capitals are fixed:

Calculation of Interest on Capital

Interest on Capital Simrat=(6,00,000×6×1/100×12)+(7,20,000×6×5/100×12)+(4,80,000×6×6/100×12)=35,400

Interest on Capital Bir=(3,60,000×6×1/100×12)+(3,00,000×6×5/100×12)+(6,00,000×6×6/100×12)=27,300

Working Notes:

WN1: Calculation of Opening Capital:

Particulars

Simrat

Bir

Capital at the end

4,80,000

6,00,000

Add: Drawings out of capital

2,40,000

60,000

Less: Fresh capital introduced

1,20,000

3,00,000

Capital at the beginning

6,00,000

3,60,000

 

 

 

 

Case2: If Capitals are Fluctuating:

Calculation of Interest on Capital

Interest on Capital Simrat=(5,76,000×6×1/100×12)+(6,96,000×6×5/100×12)+(4,56,000×6×6/100×12)= 33,960

Interest on Capital Bir=(3,24,000×6×1/100×12)+(2,64,000×6×5/100×12)+(5,64,000×6×6/100×12)= 25,140

Working Notes:

WN1: Calculation of Opening Capital:

Particulars

Simrat

Bir

Capital at the end

4,80,000

6,00,000

Add: Drawings out of capital

2,40,000

60,000

Add: Drawings out of profit

1,20,000

60,000

Less: Fresh capital introduced

1,20,000

3,00,000

Less: Profit already credited

1,44,000

96,000

Capital at the beginning

5,76,000

3,24,000

 

 

 

 

 

 

 

 

 

Question 60:


Profit earned by a partnership firm for the year ended 31st March, 2022 were distributed equally between the partners – Pankaj and Anu – without allowing interest on capital. Interest due on capital was Pankaj –  ` 3,000 and Anu –  ` 1,000.
Pass necessary adjustment entry.

Answer:


Journal

Date

Particulars

L.F.

Debit

( `)

Credit

( `)

 

Anu’s  Capital A/c

Dr.

 

1,000

 

 

To Pankaj’s Capital A/c

 

 

1,000

 

(Adjustment of omission of Interest on Capital)

 

 

 

 

 

 

 

 

Working Note:

Statement Showing Adjustment

Particulars

Pankaj

Anu

Total

Interest on Capital to be credited

3,000

1,000

4,000

Profit wrongly distributed equally to be debited

(2,000)

(2,000)

(4,000)

Net Effect

1,000

(Cr.)

1,000

(Dr.)

NIL

 

 

 

 

 

 

Ts Grewal Solution 2022-2023

Click below for more Questions

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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12th TS Grewal’s Accountancy Solutions

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