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12th | Accounting For Partnership Firms Fundamentals | Question No.  66 To 70 | 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 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
Mar.31

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

 

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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