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12th | Accounting for Partnership Firm – Fundamental | Question No. 16 To 20 | Ts Grewal Solution 2023-2024

Question 16:


X, Y and Z are partners in a firm sharing profits in 2 : 2 : 1 ratio. The fixed capitals of the partners were : X  `5,00,000; Y  ` 5,00,000 and Z  ` 2,50,000 respectively. The Partnership Deed provides that interest on capital is to be allowed @ 10% p.a. Z is to be allowed a salary of  ` 2,000 per month. The profit of the firm for the year ended 31st March, 2023 after debiting Z's salary was  ` 4,00,000.
Prepare Profit and Loss Appropriation Account.

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March 2023

Dr.                           

 

 

Cr.

Particulars

`

Particulars

`

Interest on Capital:

 

Profit and Loss A/c
(Net Profit after Z’s salary)

4,00,000

X’s Capital A/c

50,000

 

 

 

Y’s Capital A/c

50,000

 

 

 

 Z’s Capital A/c

25,000

1,25000

 

 

Profit transferred to:

 

 

 

X’s Capital A/c

1,10,000

 

 

 

Y’s Capital A/c

1,10,000

 

 

 

Z’s Capital A/c

55,000

2,75,000

 

 

 

4,00,000

 

4,00,000

 

 

 

 


Working Notes:

WN 1 Salary to Z has not been debited to Profit and Loss Appropriation Account. This is because Profit of
` 4,00,000 is given after adjusting the Z’s salary.

WN 2Calculation of Interest on Capital

 

Interest on X^' s Capital=5,00,000×10/100=50,000

Interest on Y's Capital=5,00,000×10/100=50,000

Interest on Z' s Capital=2,50,000×10/100=25,000

         
WN 3Calculation of Profit Share of each Partner

Divisible of Profit after Interest on Capital = ` 4,00,000-`1,25,000 = ` 2,75,000

Profit sharing ratio = 2 : 2 : 1

Profit share of  X' s =5,00,000×2/5=1,10,000

Profit share of  Y' s =5,00,000×2/5=1,10,000

Profit share of  Z' s=5,00,000×1/5=55,000

 

Question 17:


X and Y are partners sharing profits in the ratio of 3 : 2 with capitals of  ` 8,00,000 and  ` 6,00,000 respectively. Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of  ` 60,000 which has not been withdrawn. Profit for the year ended 31st March, 2023 before interest on capital but after charging Y's salary amounted to  ` 2,40,000.
A provision of 5% of the profit is to be made in respect commission to the manager. Prepare an account showing the allocation profits.

Answer:

Profit and Loss Account
for the year ended 31st March 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Manager’s Commission

(3,00,000×5%)

15,000

Profit and Loss A/c
(Net Profit after Y’s salary)

2,40,000

 

 

Y’s Salary

60,000

Profit transferred to Profit and Loss

 

 

 

Appropriation A/c

2,85,000

 

 

 

3,00,000

 

3,00,000

 

 

 

 

 

Profit and Loss Appropriation Account
for the year ended 31st March 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Salary to Y

60,000

Profit and Loss Adjustment A/c

2,85,000

Interest on Capital:

 

(After manager’s commission)

 

X’s Capital A/c

40,000

 

 

 

Y’s Capital A/c

30,000

70,000

 

 

Profit transferred to:

 

 

 

X’s Capital A/c

93,000

 

 

 

Y’s Capital A/c

62,000

1,55,000

 

 

 

2,85,000

 

2,85,000

 

 

 

 

Working Notes:

WN 1Calculation of Manager’s Commission

Profit for making Managers’ Commission = 2,40,000 + 60,000 (Y’s Salary) =  `3,00,000

Manager's Commission=₹3,00,000×5/100=₹15,000

WN 2Calculation of Interest on Capital

Interest on X's Capital A/c=₹8,00,000×5/100=₹40,000Interest on Y's Capital A/c=₹6,00,000×5/100=₹30,000

 

WN 3Calculation of Profit Share of each Partner

Profit available for distribution = 2,85,000- ` 60,000 - ` 70,000 =  `1,55,000

X's Share of Profit=₹1,55,000×3/5=₹93,000

Y's Share of Profit=₹1,55,000×2/5=₹62,000

 

Question 18;


Atul and Mithun are partners sharing profits in the ratio of 3: 2

Balances as on 1st April 2022 were as follows:

Capital Accounts (fixed): Atul- `5,00,000 and Mithun- `6,00,000

Loan Accounts: Atul - `3,00,000 (Cr.) and Mithun - `2,00,000 (Dr.)

It was agreed to allow and charge interest @ 8% p.a. Partnership Deed provided to allow interest on capital @ 10% p.a. Interest on Drawings was charged `5,000 each.

Profit before giving effect to above was `2,28,000 for the year ended 31st March, 2023.

Prepare Profit and Loss Appropriation Account.

 

Answer;

 

Profit and Loss Appropriation Account

Dr.

 

 

 

Cr.

Particulars

`

Particulars

`

Interest on Capital:

 

Profit and Loss A/c (Net Profit)

2,20,000

Atul’s Current A/c

50,000

 

Interest on Drawings:

 

Mithul’s Current A/c

60,000

1,10,000

Atul’s Current A/c

5,000

 

 

 

Mithul’s Current A/c

5,000

10,000 

Profit transferred to:

 

 

 

 

Atul’s Current A/c

72,000

 

 

Mithul’s Current A/c

48,000

1,20,000

 

 

2,30,000

2,30,000

 

 

 

 

Working Notes:

WN1Profit After allowed and charged Atul and Mithul Respectively

2,28,000 -24,000 +16,000 = 2,20,000


WN2interest allowed on loan given by Atul

Interest on  loan =3,00,000×8/100 = 24,000

 

WN3interest Charged on loan given to Mithul

Interest on  loan=2,00,000×8/100=16,000

 

WN4Calculation of Interest on Capital

Interest on Atul’s loan=5,00,000×10/100=50,000

Interest on Mithul's loan=6,00,000×10/100=60,000

 

WN5 Calculation of Profit Share of each Partner

Profit Share ofAtul =1,20,000×3/5=72,000

Profit Share ofMithul =1,20,000×2/5=48,000

 

Question 19:


Reema and Seema are partners sharing profits equally. The Partnership Deed provides that both Reema and Seema will get monthly salary of ` 15,000 each, Interest on Capital will be allowed @ 5% p.a. and Interest on Drawings will be charged @ 10% p.a. Their capitals were ` 5,00,000 each and drawings during the year were ` 60,000 each.
The firm incurred a loss of
` 1,00,000 during the year ended 31st March, 2023.
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2023

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2023

Dr.

 

Cr.

Particulars

`

Particulars

`

 

Profit and Loss A/c (loss)

1,00,000

Interest on Drawings A/c:

 

 

 

 

Reema’s Capital A/c

3,000

 

 

 

 

Seema’s Capital A/c

3,000

6,000

 

 

 

Loss transferred to

 

 

 

 

Reema’s Capital A/c

47,000

 

 

 

 

Seema’s Capital A/c

47,000

94,000

 

 

1,00,000

 

1,00,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Since the firm has incurred loss, no interest on capital and salary will be allowed to the partners. However, interest on drawings will be charged from each of them @ 10% p.a. on the amounts withdrawn by them for an average period of six months.

 

Question 20:


Bhanu and Partab are partners sharing profits equally. Their fixed capitals as on 1st April, 2022 are ` 8,00,000 and  ` 10,00,000 respectively. Their drawings during the year were  ` 50,000 and  ` 1,00,000 respectively. Interest on Capital is a charge and is to be allowed @ 10% p.a. and interest on drawings is to be charged @ 15% p.a. Net Profit for the year ended 31st March, 2023was  ` 1,20,000.
Prepare Profit and Loss Appropriation Account.

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital A/c:

 

Profit and Loss A/c

1,20,000

Bhanu’s Current A/c

80,000

 

Interest on Drawings A/c:

 

Partap’s Current A/c

1,00,000

1,80,000

Bhanu’s Current A/c

3,750

 

 

 

Partap’s Current A/c

7,500

11,250

 

 

Loss transferred to

 

 

 

  Bhanu’s Current A/c

24,375

 

 

 

  Partap’s Current A/c

24,375

48,750

 

 

 

 

 

1,80,000

 

1,80,000

 

 

 

 

 

 

Ts Grewal Solution 2023-2024

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Class 12 / Volume – I

Chapter 1 – Accounting For Partnership Firms Fundamentals

 

Question No. 1 To 5
Question No. 6 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 90

Question No. 91 To 95