Question 66:
Mudit, Sudhir and
Uday are partners in a firm sharing profits in the ratio of 3 : 1 : 1. Their
fixed capital balances are ` 4,00,000, ` 1,60,000 and ` 1,20,000
respectively. Net profit for the year ended 31st March, 2021 distributed
amongst the partners was ` 1,00,000, without
taking into account the following adjustments:
(a) Interest on capitals @ 2.5% p.a.;
(b) Salary to Mudit ` 18,000 p.a. and
commission to Uday ` 12,000.
(c) Mudit was allowed a commission of 6% of divisible profit after charging
such commission.
Pass a rectifying Journal entry in the books of the firm. Show workings
clearly. (CBSE Sample paper 2019)
Answer:
|
In the books of Mudit, Sudhir and Uday Journal |
||||||
|
Date |
Particulars |
|
|
L.F. |
Debit ( `) |
Credit ( `) |
|
2021 |
|
|
|
|
|
|
|
March 31 |
Sudhir’s
Current A/c |
Dr. |
|
6,000 |
|
|
|
|
To Mudit’s Current A/c |
|
|
|
1,000 |
|
|
|
To Uday’s Current A/c |
|
|
|
5,000 |
|
|
|
(Being
adjustment entry passed for rectification of errors) |
|
|
|
|
|
Working Notes:
|
Table Showing Adjustment |
||||||||
|
Particulars |
Mudit’s Current A/c |
Sudhir’s Current A/c |
Uday’s Current A/c |
Firm |
||||
|
|
Dr. (`) |
Cr. (`) |
Dr. (`) |
Cr. (`) |
Dr. (`) |
Cr. (`) |
Dr. (`) |
Cr. (`) |
|
Profits
wrongly Distributed (Dr.) |
60,000 |
|
20,000 |
|
20,000 |
|
|
1,00,000 |
|
Interest
on Capital to be |
|
|
|
|
|
|
|
|
|
Provided
(Cr.) |
|
10,000 |
|
4,000 |
|
3,000 |
17,000 |
|
|
Salary
to be provided (Cr.) |
|
18,000 |
|
|
|
|
18,000 |
|
|
Commission
to be provided (Cr.) |
|
3,000 |
|
|
|
12,000 |
15,000 |
|
|
Profit
correctly distributed (Cr.) |
|
30,000 |
|
10,000 |
|
10,000 |
50,000 |
|
|
Balance to be adjusted |
1,000(Cr.) |
6,000(Dr.) |
5,000(Cr.) |
NIL |
||||
|
Divisible
Profits |
= |
Profits
before appropriation – (Interest on Capital + Salary + Uday’s Commission) |
|
|
= |
` 1,00,000 – (17,000 + 18,000 + 12,000) = ` 53,000 |
|
Mudit’s Commission |
= |
(Divisible Profit × Rate/ 100 + Rate) |
|
|
= |
` (53,000 × 6/106) = ` 3,000 |
Question 67:
Piya and Bina are
partners in a firm sharing profits and losses in the ratio of 3 : 2. Following
was the Balance Sheet of the firm as on 31st March, 2016:
|
Liabilities |
` |
Assets |
` |
|
|
Capitals: |
|
Sundry Assets |
1,20,000 |
|
|
Piya |
80,000 |
|
|
|
|
Bina |
40,000 |
1,20,000 |
|
|
|
|
1,20,000 |
|
1,20,000 |
|
|
|
|
|
|
|
The profits ` 30,000 for the year ended 31st March, 2016 were divided
between the partners without allowing interest on capital @ 12% p.a. salary to
Piya @ ` 1,000 per month.
During the year Piya withdrew ` 8,000 and Bina withdrew ` 4,000. Showing your working notes clearly, pass the
necessary rectifying entry.
Answer:
|
Journal |
||||
|
Particular |
L.F. |
Debit (`) |
Credit (`) |
|
|
Bina’s Capital A/c |
Dr. |
|
5,856 |
|
|
To Piya’s Capital A/c |
|
|
5,856 |
|
|
(Adjustment made) |
|
|
|
|
|
|
|
|
|
|
|
Particular |
Piya |
Bina |
Total |
|
Interest on Capital @ 12% p.a. |
8,400 |
3,840 |
(12,240) |
|
Salary |
12,000 |
– |
(12,000) |
|
Profit (30,000 – 12,240 –12,000) |
3,456 |
2,304 |
5,760 |
|
Right Share |
23,856 |
6,144 |
(30,000) |
|
Wrong Share |
(18,000) |
(12,000) |
30,000 |
|
Net Effect |
5,856 (Cr.) |
5,856 (Dr.) |
Nil |
|
|
|
|
|
Working Notes:
|
Particular |
Piya |
Bina |
|
Closing Capitals |
80,000 |
40,000 |
|
Add: Drawings |
8,000 |
4,000 |
|
Less: Profit Share |
18,000 |
12,000 |
|
Opening Capital |
70,000 |
32,000 |
Question 68;
Naveen, Qadir and Rajesh were partners doing an electronic goods business in Uttarakhand. After the accounts of partnership were drawn up and closed, it was discovered that interest on capital has been allowed to partners @ 6% p.a. for the years ending 31st March,2017 and 2018, although there is no provision for interest on capital in the Partnership Deed. On the other hand, Naveen and Qadir were entitled to a salary of `3, 500 and `4,000 per quarter respectively, which has not been taken into consideration. Their fixed capitals were `4,00,000, `3,60,000 and `2,40,000 respectively. During the last two years they had shared the profits and losses as follows:
|
Year Ended |
Ratio |
|
31st March,2017 |
3:2:1 |
|
31stMarch,2018 |
5:3:2 |
Pass necessary adjusting entry for the above adjustments in the books of the firm on 1st April, 2018. Show your workings clearly. (CBSE 2019)
Answer;
|
Date |
Particulars |
|
L.F. |
Dr. ` |
Cr. ` |
|
||||||||
|
31 March |
Rajesh’s current
A/c To Naveen ’s current
A/ To Qadir’s current
A/ (Being omission of
salary , wrong interest on capital credited , now profit corrected) |
Dr. |
|
17,800 |
10,000 7,800 |
|
||||||||
|
|
Total |
|
|
17,800 |
17,800 |
|
||||||||
|
Statement
showing Adjustments |
|
|||||||||||||
|
Particulars |
Naveen |
Qadir |
Rajesh |
FIRM |
|
|||||||||
|
Dr. |
Cr. |
Dr. |
Cr. |
Dr. |
Cr. |
Dr. |
Cr. |
|||||||
|
1st Year Interest on capital Salary omitted Profit adjusted 60,000-30,000(3:2:1) 2nd Year Interest on capital Salary omitted Profit adjusted 60,000-30,000(5:3:2) |
24,000 24,000 |
14,000
15,000 14,000 15,000 |
21,600 21,600 |
16,000 10,000 16,000 9,000 |
14,400 14,400 |
5,000 |
30,000 30,000 30,000 30,000 |
60,000 60,000 |
||||||
|
Total |
48,000 |
58,000 |
43,200 |
51,000 |
28,800 |
11,000 |
1,20,000 |
1,20,000 |
||||||
|
Net effect |
|
10,000 |
|
7,800 |
17,800 |
|
|
|
||||||
Question 69:
Mannu and Shristhi are partners in a firm sharing profit in the ratio of 3 : 2. Following information is of the firm as on 31st March 2022:
|
|
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Mannu’s
Capital |
30,000 |
|
Drawings: |
|
|
|
Shristhi’s
Capital |
10,000 |
40,000 |
Mannu |
4,000 |
|
|
|
|
Shristhi |
2,000 |
6,000 |
|
|
|
|
Other
Assets |
34,000 |
||
|
|
40,000 |
|
40,000 |
||
|
|
|
|
|
||
Profit for the year ended 31st March, 2022 was ` 5,000 which was divided in the agreed ratio, but interest @ 5% p.a. on capital and @ 6% p.a. on drawings was inadvertently omitted. Adjust interest on drawings on an average basis for 6 months. Give the adjustment entry.
Answer:
Adjusting Journal Entry
|
Date |
Particular |
L.F |
Debit |
Credit |
|
|
2022 |
Shrishti's Capital A/c |
Dr. |
|
288 |
|
|
|
To
Mannu's Capital A/c |
|
|
|
288 |
|
|
(Adjustment of profit made) |
|
|
|
|
Adjustment of Profit
|
|
Mannu’s |
Shrishti |
|
Total |
|
Interest
on Capital |
1,500 |
500 |
= |
2,000 |
|
Less: Interest on
Drawings |
(120) |
(60) |
= |
(180) |
|
Right
distribution of ` 1,820 |
1,380 |
440 |
= |
1,820 |
|
Less: Wrong
distribution of ` 1,820 (3 : 2) |
(1,092) |
(728) |
= |
(1,820) |
|
Adjusted
Profit |
288 |
(288) |
= |
NIL |
Question 70;
On 31st March, 2018 the balance in the Capital Accounts of Abhir, Bobby and Vineet, after making adjustments for profits and drawings were `8,00,000, `6,00,000 and `4,00,000 respectively.
Subsequently, it was discovered that interest on capital and interest on drawings had been omitted. The partners were entitled to interest on capital @ 10% p.a. and were to be charged interest on drawings @ 6% pa. The drawings during the year were: Abhir- `20,000 drawn at the end of each month, Bobby- `50,000 drawn at the beginning of every half year and Vineet- `1,00,000 withdrawn on 31st October, 2017.The net profit for the year ended 31st March, 2018 was `1,50,000.The profit-sharing ratio was 2 :2 : 1.
Pass necessary adjusting entry for the above adjustments in the books of the firm. Also, show your workings clearly. (CBSE2019)
Answer;
|
Date |
Particulars |
|
L.F. |
Dr. ` |
Cr. ` |
|
31 March |
Bobby’s Capital
A/c To Naveen ’s Capital
A/c To Qadir’s Capital
A/c (Being omission of
salary , wrong interest on capital credited , now profit corrected) |
Dr. |
|
24,660 |
17,240 7,420 |
|
|
Total |
|
|
24,660 |
24,660 |
Working note;
Calculation of opening
Capital ;
|
Particulars |
Abhir |
Bobby |
vineet |
|
Closing capital Add; drawings Less; Profit |
8,00,000 2,40,000 60,000 |
6,00,000 1,00,000 60,000 |
4,00,000 1,00,000 30,000 |
|
Opening capital |
9,80,000 |
6,40,000 |
4,70,000 |
Calculation of opening Drawings;
Abhir= 20,000×12×6/100×5.5/12=6,600
Bobby= 50,000×2×6/100×9/12=4,500
Vineet = 1,00,000×6/100×5/12=2,500
|
Statement
showing Adjustments |
||||||||
|
Particulars |
A |
B |
C |
FIRM |
||||
|
Dr. |
Cr. |
Dr. |
Cr. |
Dr. |
Cr. |
Dr. |
Cr. |
|
|
Interest on capital
omitted Interest on Drawing
omitted |
6,600 |
98,000 |
4,500 |
64,000 |
2,500 |
47,000 |
2,09,000 |
13,600 |
|
Net interest omitted Net loss of above
omission |
78,160 |
91,400 |
78,160 |
59,500 |
39,090 |
44,500 |
1,95,400 |
1,95,400 |
|
Total |
78,160 |
91,400 |
74,160 |
49,500 |
37,080 |
44,500 |
1,85,400 |
1,85,400 |
|
Net effect |
|
17,240 |
24,160 |
|
|
7,420 |
|
|
Ts Grewal Solution 2022-2023
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Class 12 / Volume – I
Chapter 1 – Accounting For Partnership Firms Fundamentals
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