commercemine.com

12th | Accounting For Partnership Firms Fundamentals | Question No.  71 To 75 | 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 71:


On 31st March, 2014, the balances in the Capital Accounts of Saroj, Mahinder and Umar after making adjustments for profits and drawings, etc., were  ` 80,000,  ` 60,000,  ` 40,000 respectively. Subsequently, it was discovered that the interest on capital and drawings has been omitted.
(a) The profit for the year ended 31st March, 2014 was  ` 80,000.
(b) During the year Saroj and Mahinder each withdrew a sum of  ` 24,000 in equal instalments in the end of each month and Umar withdrew
 ` 36,000.
(c) The interest on drawings was to be charged @ 5% p.a. and interest on capital was to be allowed @ 10% p.a.
(d) The profit-sharing ratio among partners was 4 : 3 : 1.
Showing your workings clearly, pass the necessary rectifying entry.

Answer:


Journal

Particular

L.F.

Debit
(
`)

Credit
(
`)

Saroj’s Capital A/c

Dr.

 

2,350

 

Mahinder’s Capital A/c

Dr.

 

1,300

 

To Umar’s Capital A/c

 

 

3,650

(Adjustment made)

 

 

 

 

 

 

 

 
Working Notes:
 

Particular

Saroj

Mahinder

Umar

Closing Capitals

80,000

60,000

40,000

  Add: Drawings

24,000

24,000

36,000

  Less: Profit Share

40,000

30,000

10,000

Opening Capital

64,000

54,000

66,000

 

Particular

Saroj

Mahinder

Umar

Total

Interest on Capital @ 10% p.a.

6,400

5,400

6,600

(18,400)

Interest on Drawings@ 5% p.a.

(550)

(550)

(900)

2,000

Profit (80,000 – 18,400 + 2,000)

31,800

23,850

7,950

(63,600)

Right Share

37,650

28,700

13,650

(80,000)

Wrong Share

(40,000)

(30,000)

(10,000)

80,000

Net Effect

2,350 (Dr.)

1,300

(Dr.)

3,650

(Cr.)

Nil

 

 

 

 

 

 

Question 72:


Capitals of kajal, Neerav and Alisha as on 31st March, 2022 amounted to  ` 90,000,  ` 3,30,000 and  ` 6,60,000 respectively. Profit of  ` 1,80,000 for the year ended 31st March, 2022 was distributed in the ratio of 4 : 1 : 1 after allowing interest on Capital @ 10% p.a. During the year, each partner withdrew  ` 3,60,000. The Partnership Deed was silent as to profit-sharing ratio but provided for interest on capital @ 12%.
Pass the necessary adjustment entry showing the working clearly.

Answer:


In the books of A, B and C

Journal

Date

Particulars

 

 

L.F.

Debit

( `)

Credit
(
`)

2022

Mar.31


kajal’s Capital A/c

 


Dr.

 


66,600

 

 

To Neerav’s Capital A/c

 

 

 

 

30,000

 

To Alisha’s Capital A/c

 

 

 

 

36,600

 

(Being adjustment made for interest on capital and profits)

 

 

 

 

 

 

Statement Showing Adjustment:

Particulars

kajal’s Capital A/c

Neerav’s Capital A/c

Alisha’s Capital A/c

Firm

 

Dr.

(  `)

Cr.

(  `)

Dr.

(  `)

Cr.

(  `)

Dr.

(  `)

Cr.

(  `)

Dr.

(  `)

Cr.

(  `)

Profits wrongly credited in the ratio 4:1:1(Dr.)

1,20,000

 

30,000

 

30,000

 

 

1,80,000

Interest on Capital wrongly credited @10% p.a. (Dr.)

33,000

 

66,000

 

99,000

 

 

1,98,000

Interest on Capital to be provided @12% p.a. (Cr.)

 

39,600

 

79,200

 

1,18,800

2,37,600

 

Profits to be credited in the ratio 1:1:1 (Cr.)

 

46,800

 

46,800

 

46,800

1,40,400

 

Balance to be adjusted

66,600 (Dr.)

30,000 (Cr.)

36,600 (Cr.)

NIL


Note: Since, there is no provision of interest on drawings in the partnership deed so we will not provide it.

Calculation of Opening Capital of the Partners: 

Particulars

Kajal
(
`)

Neerav
(
`)

Alisha
(
`)

Closing Capital of the partners

90,000

3,30,000

6,60,000

Add: Drawings made during the year

3,60,000

3,60,000

3,60,000

Less: Profits for the year

1,20,000

30,000

30,000

Opening Capital of the partners as on 1st April, 2021

3,30,000

6,60,000

9,90,000

Note: Interest on Capital is always computed on the opening capitals.

 

Question 73:


Mohit and Sobhit are partners sharing profits in the ratio of 3 : 2. Rohit was admitted for 1/6th share of profit with a minimum guaranteed amount of  ` 10,000. At the close of the first financial year the firm earned a profit of  ` 54,000. Find out the share of profit which Mohit, Sobhit and Rohit will get.

Answer:


Profit and Loss Appropriation Account

Dr.

for the year ended 31st March

Cr.

Particulars

 ( `)

Particulars

 ( `)

Profit transferred to:                

 

Profit and Loss A/c (Net Profit)

54,000

Mohit’s Capital a/c

26,400

 

 

 

Sobhit’s Capital a/c

17,600

 

 

 

Rohit’s Capital a/c

10,000

54,000

 

 

 

54,000

 

54,000

 

 

 

 


Working Note

Rohit will get higher of the two:

(i) Share of Profit as per profit sharing ratio, i.e., 54,000×1/6==9,000

(ii) Minimum guaranteed profit, i.e. ` 10,000
Thus from net profit of ` 54,000, minimum guaranteed profit to Rohit of ` 10,000 is to be adjusted first.

And the balance profit of ` 44,000 (54,000 – 10,000) is to be shared by Mohit and Sobhit in the ratio 3:2

final share:

Mohit’s share =44,000×3/5=26,400

Sobhit’s share =44,000×2/5=17,600

Rohit’s share =10,000 (minimum guarantee)

 

Question 74


A, B and C were in partnership sharing profits and losses in the ratio of 4 :2 : 1. It was provided that Cs share in profit for a year would not be less than `75,000. Profit for the year ended 31st March, 2022 amounted to  `3,15,000. You are required to show the appropriation among the partners. The Profit and Loss Appropriation Account is not required.

Minimum Earnings Guaranteed by a Partner

 

Answer;


Working notes;

Profit and loss appropriation account for year ended 31st March, 2022

 

Particulars

`

Particulars

`

To Profit

A-    18,000-2,000   =16,000

B-    9,000-1,000   =  8,000

C-    4,500+3,000    = 7,500

 

 

 

31,500

By net profit

31,500

 

31,500

 

31,500

 

Note; initial profit distributed 3000 in 4;2 or 2:1 in the absence of any information in the question No profit and loss a/c is required we can appropriate as below;

Appropriation of profit

 

A-    18,000-2,000   =16,000

B-    9,000-1,000     =  8,000

C-    4,500+3,000     = 7,500

 

31,500

 

Question 75:


X, Y and Z entered into partnership on 1st October, 2021 to share profits in the ratio of 4 : 3 : 3. X, personally guaranteed that Z's share of profit after charging interest on capital @ 10% p.a. would not be less then  ` 80,000 in any year. Capital contributions were: X ` 3,00,000, Y ` 2,00,000 and Z ` 1,50,000.
Profit for the year ended 31st March, 2022 was  ` 1,60,000. Prepare Profit and Loss Appropriation Account.

Answer:


Profit and Loss Appropriation Account

for the year ended March 31, 2022

Dr.

 

Cr.

Particulars 

 ( `)

Particulars

 ( `)

Interest on Capital:                     

 

Net Profit b/d                       

1,60,000

X’s Capital a/c

15,000

 

 

 

Y’s Capital a/c

10,000

 

 

 

Z’s Capital a/c

7,500

32,500

 

 

 

 

 

 

Profit transferred to:

 

 

 

X (51,000 – 1,750)

49,250

 

 

 

  Y (38,250)

38,250

 

 

 

Z (38,250 + 1,750)

40,000

1,27,500

 

 

 

1,60,000

 

1,60,000

 

 

 

 

 

 

 

 

Note: Since Z is admitted on 1st October, 2021 and Profit is ascertained on March 31, 2022, therefore, interest on capital is calculated for 6 months and guaranteed amount is considered as ` 40,000 (half of the total amount).

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

Click on below links for 

12th TS Grewal’s Accountancy Solutions

Ts Grewal Solution 2022-2023

Ts Grewal Solution 2021-2022

Ts Grewal Solution 2020-2021