12th | Accounting for Partnership Firm – Fundamental | Question No. 31 To 35 | Ts Grewal Solution 2025-2026

(i) When Partnership Deed is silent as to the interest on capital and profit for the year is ₹ 50,000.

(ii) When Partnership Deed provides for interest on capital @ 10% p.a. and profit for the year is ₹ 15,000.

(iii) When the Partnership Deed provides for interest on capital @ 12% and profit for the year is ₹ 23,000.

(iv) When the Partnership Deed provides for interest on capital @ 5% p.a. and loss for the year is ₹ 8,000.

(V) When Partnership Deed provides for interest on capital @ 5% p.a. and profit for the year is ₹ 3,000.

(vi) When Partnership Deed provides for interest on capital @ 5% p.a. even if it involves the firm in loss and the profit for the year is ₹ 6,000.

 

Case - (i) When Partnership Deed is silent as to the interest on capital and profit for the year is ₹ 50,000.

Solution: Interest on capital will not be allowed. Profits: Sumit =30,000; Namit =20,000.

Reason: Since no agreement as to interest on Capital. Interest on capital will not be allowed.

 

Case - (ii) When Partnership Deed provides for interest on capital @ 10% p.a. and profit for the year is ₹ 15,000.

Solution: Interest on Capital: Sumit ₹ 10,000, Namit = ₹ 5,000. Profit is not left for distribution.

Reason: interest is allowed as per agreement profit is enough to be distributed, but Profit is not left for distribution because interest and profit equal.

 

Case - (iii) When the Partnership Deed provides for interest on capital @ 12% and profit for the year is ₹ 23,000.

Solution: Interest on Capital: Sumit = ₹ 12,000; Namit = ₹ 6,000 as per rate of interest on capital @12%.

Profit: Sumit = ₹ 3,000; Namit - ₹ 2,000; Distributable profit= 23,000-18,000=5,000.

 

Case - (iv) When the Partnership Deed provides for interest on capital @ 5% p.a. and loss for the year is ₹ 8,000.

Solution: interest on capital is not distributed in case of loss.

            Loss is distributed as per profit sharing ratio

            Loss: Sumit = ₹ 4,800; Namit = ₹ 3,200

 

Case - (V) When Partnership Deed provides for interest on capital @ 5% p.a. and profit for the year is ₹ 3,000.

Solution: Since profit of ₹ 3,000 will be distributed in the ratio of 2:1 in the ratio of capital or interest on capital.

Interest on Capital: Sumit – ₹ 2,000 Namit = ₹ 1,000 as per ratio of interest on capital.

No profit is left for distribution among the partner since entire amount of Profit is distributed as interest.

 

Case - (vi) When Partnership Deed provides for interest on capital @ 5% p.a. even if it involves the firm in loss and the profit for the year is ₹ 6,000.

Solution: Interest on capital: Sumit = ₹ 5,000; Namit =₹ 2,500,

Loss: Sumit = ₹ 900; Namit = ₹ 600 (loss after interest= 6,000-7,500=1,500).

 

Shiv, Mohan and Gopal are partners sharing profits and losses in the ratio of 2 : 2 : 1 respectively. Shiv is entitled to a commission of 10% on the net profit. Net profit for the year is  ` 1,10,000.
Determine the amount of commission payable to Shiv.

Net Profit before charging commission = ` 1,10,000

Commission to Shiv = 10% of on Net Profit before charging such commission          

Partner' s Commission =(Netprofit×rate of commission)/100

Shiv ' s Commission =(1,10,000×10)/100=11,000

 

Abha, Bobbyand Vineet are partners sharing profits and losses equally. As per Partnership Deed, Vineet is entitled to a commission of 10% on the net profit after charging such commission. The net profit before charging commission is `2,20,000.
Determine the amount of commission payable to Vineet.

Net Profit before charging Commission = ` 2,20,000

Commission to Vineet = 10% of on Net Profit after charging such commission

Partner' s Commission =(Net profit×Rate of commission)/(100+Rate of commission)

Vineet's Commission=(2,20,000×10)/(100+10)=20,000

 

A, B, C, and D are partners in a firm sharing profits as 4 : 3 : 2 : 1 respectively. It earned a profit of `1,80,000 for the year ended 31st March, 2025. As per the Partnership Deed, they are to charge a commission @ 20% of the profit after charging such commission which they will share as 2 : 3 : 2 : 3.

You are required to show appropriation of profits among the partners.

Profit and Loss Appropriation Account for the year ended March 31, 2025
Dr.				Cr.
Particulars		`		Particulars		`
Partners’ Commission:				Profit and Loss A/c		1,80,000
A’s Capital A/c	6,000		(Net Profit)
B’s Capital A/c	9,000
C’s Capital A/c	6,000
D’s Capital A/c	9,000	30,000
Profit transferred to:
A’s Capital A/c	60,000
B’s Capital A/c	45,000
C’s Capital A/c	30,000
D’s Capital A/c	15,000	1,50,000
		1,80,000				1,80,000

Working Notes:

WN 1Calculation of Partners’ Commission

Partners’ Commission = 20% on Net Profit after charging such commission

Partners' Commission = (Net profit×Rate of commission)/(100+Rate of commission)

Partners' Commission = (1,80,000×20)/(100+20)=30,000

This commission is to be shared by the partners in the ratio of 2 : 3 : 2 : 3

A' s Commission =(30,000×2)/10=6,000

B' s Commission =(30,000×3)/10=9,000

C' s Commission =(30,000×2)/10=6,000

D's Commission =(30,000×3)/10=9,000

 

WN 2Calculation of Profit Share of each Partner

Profit available for Distribution = 1,80,000- ` 30,000 = ` 1,50,000

Profit sharing ratio = 4 : 3 : 2 : 1

A' s Profit share=(1,50,000×4)/10=60,000

B' s Profit share=(1,50,000×3)/10=45,000

C' s Profit share=(1,50,000×2)/10=30,000

D's Profit share=(1,50,000×1)/10=15,000

 

X and Y are partners in a firm. X is entitled to a salary of  ` 10,000 per month and commission of 10% of the net profit after partners' salaries but before charging commission. Y is entitled to a salary of  ` 25,000 p.a. and commission of 10% of the net profit after charging all commission and partners' salaries. Net profit before providing for partners' salaries and commission for the year ended 31st March, 2025 was ` 4,20,000. Show distribution of profit.

Profit and Loss Appropriation Account for the year ended March 31, 2025
Dr.				Cr.
Particulars			( `)	Particulars	( `)
Partners’ Salary:				Profit and Loss A/c	4,20,000
X (10,000 × 12)	1,20,000			(Net Profit)
Y	25,000		1,45,000
Partners’ Commission:
X’s Capital A/c		27,500
Y’s Capital A/c		22,500	50,000
Profit transferred to:
X’s Capital A/c	1,12,500
Y’s Capital A/c	1,12,500		2,25,000
			4,20,000		4,20,000

Working Notes:

WN 1- Calculation of Commission

Commission to X = 10% of Net Profit after partners’ salaries but before charging such commission

Profit after Partners’ Salaries = 4,20,000 - ` 1,45,000 =  ` 2,75,000

Commission to X	= Profit after Partners’ Salaries × Rate of commission / 100
	= 2,75,000 ×  10 /100= 27,500

Commission to Y = 10% of Net Profit after charging Commission and Partners’ Salaries

Profit after commission and partners’ salaries = 4,20,000-` 1,45,000-` 27,500 =  ` 2,47,500

Commission to Y	= Profit after commission and partners’ salaries × Rate of commission / 100+Rate
	= 2,45,500 ×  10 /100+10= 22,500

WN 2- Calculation of Profit Share of each Partner

Profit available for distribution = 4,20,000-` 1,45,000 -` 50,000 =  `2,25,000

Profit sharing ratio = 1 : 1

 Profit share of each X and Y = 2,25,000×1/2