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12th | Accounting for Partnership Firm – Fundamental | Question No. 21 To 25 | Ts Grewal Solution 2023-2024

Question 21:

Amit and Sumit entered into partnership on 1st April, 2022 contributing`1,50,000 and  ` 2,50,000 respectively towards capital. The Partnership Deed provided for interest on capital @ 10% p.a. It also provided that Capital Accounts shall be maintained following Fixed Capital Accounts method. The firm earned net profit of `1,00,000 for the year ended 31st March,2023.
Pass the Journal entry for interest on capital.

Answer:

Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

( `)

2023

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

40,000

 

 

    To Amit’s Current A/c

 

 

 

15,000

 

    To Sumit’s Current A/c

 

 

 

25,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

Working Notes:

 

WN1: Calculation of Interest on Capital:
Amit's Interest on Capital=1,50,000×10/100=
` 15,000

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

 

Question 22:

Kamal and Kapil are partners having fixed capitals of  ` 5,00,000 each as on 31st March, 2022. Kamal introduced further capital of  ` 1,00,000 on 1st October, 2022 whereas Kapil withdrew  ` 1,00,000 on 1st October, 2022 out of capital.
Interest on capital is to be allowed @ 10% p.a.
The firm earned net profit of 
` 6,00,000 for the year ended 31st March 2023.
Pass the Journal entry for interest on capital and prepare Profit and Loss Appropriation Account.

Answer:

Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2023

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

1,00,000

 

 

    To Kamal’s Current A/c

 

 

 

55,000

 

    To Kapil’s Current A/c

 

 

 

45,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended 31 March 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital A/c:

 

Profit and Loss A/c

6,00,000

Kamal’s Current  A/c

55,000

 

 

 

Kapil’s Current  A/c

45,000

1,00,000

 

 

Profit transferred to:

 

 

 

Kamal’s Current  A/c

2,50,000

 

 

 

Kapil’s Current  A/c

2,50,000

5,00,000

 

 

 

6,00,000

 

6,00,000

 

 

 

 


 

Working Notes:

WN1: Calculation of Interest on Capital:

Kamal = (5,00,000×10×6÷100×12) + (6,00,000×10×6÷100×12) = `. 55,000

Kapil=(5,00,000×10×6÷100×12) + (4,00,000×10×6÷100×12) = `. 45,000
 

 

 

 

Question 23:

Simran and Reema are partners sharing profits in the ratio of 3 : 2. Their capitals as on 1st April, 2022 were ` 2,00,000 each whereas Current Accounts had balances of  ` 50,000 and  ` 25,000 respectively interest is to be allowed @ 5% p.a. on balances in Capital Accounts. The firm earned net profit of  ` 3,00,000 for the year ended 31st March 2023.
Pass the Journal entries for interest on capital and distribution of profit. Also prepare Profit and Loss Appropriation Account for the year.

Answer:

Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

 

Profit & Loss Appropriation A/c

Dr.

 

20,000

 

 

    To Simran’s Current A/c

 

 

 

10,000

 

    To Reema’s Current A/c

 

 

 

10,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

 

 

 

 

 

 

Profit & Loss Appropriation A/c

 

 

2,80,000

 

 

    To Simran’s Current A/c

 

 

 

1,68,000

 

    To Reema’s Current A/c

 

 

 

1,12,000

 

(Profit transferred to Partners’ Current A/c)

 

 

 

 

 

 

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended 31 March 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital A/c:

 

Profit and Loss A/c

3,00,000

Simran’s Current  A/c

10,000

 

 

 

Reema’s Current  A/c

10,000

20,000

 

 

Profit transferred to:

 

 

 

Simran’s Current  A/c

1,68,000

 

 

 

Reema’s Current  A/c

1,12,000

2,80,000

 

 

 

3,00,000

 

3,00,000

 

 

 

 

 

Working Notes:

WN1: Calculation of Interest on Capital

Simran's Interest on Capital = 2,00,000×5÷100=
` 10,000

Reema's Interest on Capital = 2,00,000×5÷100=` 10,000

 

Question 24:

Anita and Ankita are partners sharing profits equally. Their capitals, maintained following Fluctuating Capital Accounts Method, as on 1st April, 2022 were ` 5,00,000 and  ` 4,00,000 respectively. Partnership Deed provided to allow interest on capital @ 10% p.a. The firm earned net profit of  ` 2,00,000 for the year ended 31st March, 2023.
Pass the Journal entry for interest on capital.

Answer:

Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2023

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

90,000

 

 

    To Anita’s Capital A/c

 

 

 

50,000

 

    To Ankita’s Capital A/c

 

 

 

40,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

Working Notes:

WN1: Calculation of Interest on Capital

Anita's Interest on Capital = 5,00,000×10÷100=
` 50,000

Ankita's Interest on Capital = 4,00,000×10÷100=` 40,000

 

Question 25:

Ashish and Aakash are partners sharing profit in the ratio of 3 : 2. Their Capital Accounts showed a credit balance of  ` 5,00,000 and  ` 6,00,000 respectively as on 31st March, 2023 after debit of drawings during the year of  ` 1,50,000 and  ` 1,00,000 respectively. Net profit for the year ended 31st March, 2023 was ` 5,00,000. Interest on capital is to be allowed @ 10% p.a.
Pass the Journal entry for interest on capital and prepare Profit and Loss Appropriation Account.

Answer:

Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

2023

 

 

 

 

 

March 31

Profit & Loss Appropriation A/c

Dr.

 

1,35,000

 

 

    To Ashish’s Capital A/c

 

 

 

65,000

 

    To Aakash’s Capital A/c

 

 

 

70,000

 

(Interest on capital transferred to Profit & Loss Appropriation A/c)

 

 

 

 

 

 

 

 

3,65,000

 

 

Profit & Loss Appropriation A/c

 

 

 

2,19,000

 

    To Ashish’s Capital A/c

 

 

 

1,46,000

 

    To Akash’s Capital A/c

 

 

 

 

 

(Profit transferred to Partners’ Capital A/c)

 

 

 

 

 

 

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended 31 March 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital A/c:

 

Profit and Loss A/c

5,00,000

Ashish

65,000

 

 

 

Aakash

70,000

1,35,000

 

 

Profit transferred to:

 

 

 

Ashish’s Capital  A/c

2,19,000

 

 

 

Aakash’s Capital  A/c

1,46,000

3,65,000

 

 

 

5,00,000

 

5,00,000

 

 

 

 

 

Working Notes:

WN1: Calculation of Opening Capital:

Particulars

Ashish

Aakash

Capital at the end

5,00,000

6,00,000

Add: Drawings made

1,50,000

1,00,000

Capital at the beginning

6,50,000

7,00,000

 

WN2: Calculation of Interest on Capital

Ashish's Interest on Capital = 6,50,000×10/100=
` 65,000

Aakash's Interest on Capital = 7,00,000×10/100=` 70,000

 

 

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