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12th | Accounting For Partnership Firms Fundamentals | Question No.  61 To 65 | 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 61: Ram, Mohan and Sohan were partners sharing profits in the ratio of 2:1:1. Ram withdrew `3,000 every month and Mohan withdrew `4,000 every month. Interest on drawings @ 6% p.a. was charged, whereas the partnership deed was silent about interest on drawings.


Showing your working clearly, pass the necessary adjustment entry to rectify the error.

 

Answer:


Particulars

`

`

Ram’s Capital A/c   Dr,

Mohan’s Capital A/c   Dr,

            To Sohan’s Capital A/c

(Being interest on Drawing Charged Wrongly, now Rectified)

180

630

 

 

810

 

Working notes:

WN1:

Table of Adjustments

 

Ram

Mohan

Sohan

Interest on Drawing Wrongly Debited

1,080

-

1,440

Profits to be credited

1,260

630

630

Amount to adjusted

180(Dr.)

630(Dr.)

810(Cr.)

 

WN2: Interest on Drawing Wrongly Debited

Ram’s Interest on Drawing= 36,000×6/100×6/12=1,080

Sohan’s Interest on Drawing= 48,000×6/100×6/12=1,440

 

WN3: Profits to be credited (1,080+1,440=2,120)

Ram =  2,520×2/4=1,260

Mohan =2,520×1/4=630

Sohan = =2,520×1/4=630

 

Question 62:


Mita and Usha are partners in a firm sharing profits in the ratio of 2 : 3. Their Capital Accounts as on 1st April, 2015 showed balances of  ` 1,40,000 and  ` 1,20,000 respectively. The drawings of Mita and Usha during the year 2015-16 were  ` 32,000 and  ` 24,000 respectively. Both the amounts were withdrawn on 1st January 2016. It was subsequently found that the following items had been omitted while preparing the final accounts for the year ended 31st March, 2016:
(a) Interest on Capital @ 6% p.a.
(b) Interest on Drawings @ 6% p.a.
(c) Mita was entitled to a commission of
 ` 8,000 for the whole year.
Showing your working clearly, pass a rectifying entry in the books of the firm.

Answer:


Journal

Particular

L.F.

Debit

( `)

Credit

( `)

Usha’s Capital A/c

Dr.

 

6,816

 

To Mita’sCapital A/c

 

 

6,816

(Adjustment made)

 

 

 

 

Particular

Mita

Usha

Total

Interest on Capital @ 6% p.a.

8,400

7,200

(15,600)

Interest on Drawings @ 6% p.a.

(480)

(360)

840

Commission

8,000

(8,000)

Right Share

15,920

6,840

(22,760)

Wrong Share

(9,104)

(13,656)

22,760

Net Effect

6,816

(Cr.)

6,816

(Dr.)

Nil

 

 

 

 

 

Question 63;


A, B and C were partners. Their fixed capitals were `60,000, `40,000 and `20,000 respectively. Their profit sharing ratio was 2 :2 : 1. According to the Partnership Deed, they were entitled to interest on capital @ 5% pa. In addition, 8 was also entitled to draw a salary of `1,500 per month. C was entitled to a commission of 5% on the profits after charging the interest on capital, but before charging the salary payable to B. The net profits for the year, `80,000, were distributed in the ratio of their capitals without providing for any of the above adjustments. Showing your workings clearly, pass the necessary adjustment entry.  (CBSE 2019)

 

Answer;


 

Date

Particulars

 

L.F.

Dr. `

Cr. `

31 March

A’s  current      A/c    

     To B ’s  current      A/

     To C’s  current      A/

(Being omission of salary , interest on capital , commission now profit corrected)

Dr.

 

 

 

16,080

 

 

14,253

1,827

 

 

 

 

 

 

16,080

16,080

 

 Correct Profit and loss appropriation account year ended 31 March

 

Particulars

`

Particulars

`

To cc

B=1500×12=18,000

To Commission

(C=80,000-6,000×5/100)

 

To Interest on capital

A-60,000×5/100=3,000

B-40,000×5/100=2,000

C-20,000×5/100=1,000

To profit

A-52,300×2/5=20,920

B -52,300×2/5=20,920

C -52,300×1/5=10,460

 

 

18,000

 

3,700

 

 

 

 

6,000

 

 

 

52,300

By  Net profit

 

80,000

4,500

 

80,000

 

80,000

 

Statement showing Adjustments

 

Particulars

A

B

C

FIRM

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Interest on capital

Salary omitted

Commission omitted

Correct Profit omitted

Wrong Profit credited

 

 

 

 

40,000

3,000

 

 

20,920

 

 

 

 

26,667

2,000

18,000

 

20,920

 

 

 

 

13,333

1,000

 

3,700

10,460

6,000

18,000

3,700

52,300

 

 

 

 

80,000

Total

40,000

23,920

26,667

40,000

 

 

80,000

80,000

Net effect

16,080

 

 

14,263

 

1,827

 

 

 

Question 64:


On 31st March, 2022, after the closing of the accounts, the Capital Accounts of P, Q and R stood in the books of the firm at  ` 40,000;  ` 30,000 and  ` 20,000 respectively. Subsequently, it was noticed that interest on capital @ 5% had been omitted. Profit for the year ended 31st March, 2022 was  ` 60,000 and the partners' drawings had been P  ` 10,000, Q ` 7,500 and R  ` 4,500.  Profit-sharing ratio of P, Q and R is 3 : 2 : 1. Give necessary adjustment entry.

Answer:


Journal

Date

Particulars

L.F.

Debit

( `)

Credit

( `)

2022

Mar.31


P’s Current A/c


Dr.

 


300

 

 

To Q’s Capital A/c

 

 

8

 

To R’s Capital A/c

 

 

292

 

(Interest on Capital was omitted, now adjusted)

 

 

 

 

 

 

 

 


Working Notes:

WN 1 Calculation of Capital at the beginning (as on April 01, 2021)

Particulars

P

Q

R

Capital as on March 31, 2022 (Closing)   

40,000

30,000

20,000

Add: Drawings

10,000

7,500

4,500

Less: Profit ` 60,000 (3:2:1)

(30,000)

(20,000)

(10,000)

Capital as on April 01, 2021 (Opening)

20,000

17,500

14,500

 

 

 

 


WN 2 Calculation of Interest on Capital

Interest on P’s capital=20,000×5/100=1000

Interest on Q’s capital=17,500×5/100=875
Interest on R’s capital=14,500×5/100=725
WN 3

Statement Showing Adjustment

Particulars

P

Q

R

Total

Interest on Capital (to be credited)            

1,000

875

725

2,600

For sharing above Loss (3:2:1)

(1,300)

(867)

(433)

(2,600)

Net Effect

(300)

8

292

NIL

 

 

 

 

 

 

Question 65:


 Mohan, Vijay and Anil are partners, the balances of their Capital Accounts being  ` 30,000,  ` 25,000 and  ` 20,000 respectively. In arriving at these amounts profit for the year ended 31st March, 2022,  ` 24,000 had already been credited to partners in the proportion in which they shared profits. Their drawings were  ` 5,000 (Mohan),  ` 4,000 (Vijay) and  ` 3,000 (Anil) during the year. Subsequently, the following omissions were noticed and it was decided to rectify the errors:
(a) Interest on capital @ 10% p.a.
(b) Interest on drawings: Mohan
 ` 250, Vijay  ` 200 and Anil  ` 150.
Make necessary corrections through a Journal entry and show your workings clearly.

Answer:


 

Journal

Date

Particulars

L. F.

Debit

( `)

Credit

( `)

2022

March 31


Anil’s Capital A/c


Dr.

 


550

 

 

To Mohan’s Capital A/c

 

 

550

 

(Interest on capital and interest on drawings was omitted, now adjusted)

 

 

 

 

Working Notes:

 

WN 1 Calculation of Capital at the beginning

Particulars

Mohan

Vijay

Anil

Total

Capital at the end

30,000

25,000

20,000

75,000

Add: Drawings

5,000

4,000

3,000

12,000

Less: Profit (1:1:1)

(8,000)

(8,000)

(8,000)

(24,000)

Capital in the beginning

27,000

21,000

15,000

63,000

 

 

 

 

 

 

WN 2 Calculation of Interest on Capital

Interest on Mohan’s capital=27,000×10/100=2,700

Interest on Vijay’s capital=21,000×10/100=2,100

Interest on Anil’s capital=25,000×10/100=2,500

 

WN 3

Statement Showing Adjustment

 

Mohan

Vijay

Anil

Total

Interest on Capital to be credited

2,700

2,100

1,500

6,300

Less: Interest on Drawings

(250)

(200)

(150)

(600)

Right Distribution of ` 5,700

2,450

1,900

1,350

5,700

Wrong Distribution of ` 5,700

(1 : 1 : 1)

(1,900)

(1,900)

(1,900)

(5,700)

Net Effect

550

Nil

(550)

NIL

 

 

 

 

 

 

WN 4 Calculation of Final Profit Share of Partners

Total Corrected Profit Available for Distribution = Profit - Interest on Capital + Interest on Drawings = 24,000 – 6,300 + 600 = ` 18,300

Corrected profti of Mohan,Vijay,Anil each =18,300×1/3=6,100

 

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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