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12th | Accounting for Partnership Firm – Fundamental | Question No. 56 To 60 | Ts Grewal Solution 2023-2024

Question 56:


Sajal and Kajal are partners sharing profits and losses in the ratio of 2 : 1. On 1st April, 2022 their Capitals were: Sajal –  ` 50,000 and Kajal –  ` 40,000.
Prepare Profit and Loss Appropriation Account and the Partners' Capital Accounts at the end 31st March, 2023 from the following information:
(a) Interest on Capital is to be allowed @ 5% p.a.
(b) Interest on the loan advanced by Kajal for the whole year, the amount of loan being 
` 30,000.
(c) Interest on partners' drawings @ 6% p.a. Drawings: Sajal
` 10,000 and Kajal ` 8,000.
(d) 10% of the divisible profit is to be transferred to Reserve.
Net profit for the year ended 31st March, 2023 is 
` 68,460.
Note: Net profit means net profit after debit of interest on loan by the partner.

Answer:

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

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Kajal’s loan@ 6% p.a.

1,800

Profit                                 

70,260

Profit transferred to P/L Appropriation A/c

68,460

 

 

 

 

 

 

 

70,260

 

70,260

 

 

 

 

 

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

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital A/c:

 

Profit and Loss A/c

68,460

Sajal’s Capital A/c

2,500

 

 

 

Kajal’s Capital A/c

2,000

4,500

Interest on Drawings A/c:      

 

 

 

Sajal’s Capital A/c

300

 

Reserve

6,450

Kajal’s Capital A/c

240

540

Profit transferred to:

 

 

 

Sajal’s Capital A/c

  38,700

 

 

 

Kajal’s Capital A/c

19,350

58,050

 

 

 

69,000

 

69,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Sajal
(
`)

Kajal
(
`)

Particulars

Sajal
(
`)

Kajal
(
`)

Drawings A/c

10,000

8,000

Balance b/d

50,000

40,000

Interest on Drawings A/c

300

240

Interest on Capital A/c

2,500

2,000

 

 

 

P&L Appropriation A/c

38,700

19,350

Balance c/d

80,900

53,110

 

 

 

 

91,200

61,350

 

91,200

61,350

 

 

 

 

 

 

Working Notes:

WN 1Calculation of Interest on Capital

Interest on Sajal’s capital=50,000×5/100=2,500

Interest on Kajal’s capital=20,000×5/100=2,000

 

WN 2Calculation of Interest on Drawings

Interest on Sajal’s Drawing=10,000×6/100×6/12=300

Interest on Kajal’s Drawing=8,000×6/100×6/12=240

 

WN 3Calculation of Amount to be transferred to Reserve

Amount for Reserve = 10% of Divisible Profit

Divisible Profit = Profit + Interest on Drawings -` Interest on Capital

= 68,460 + 540  4,500 = ` 64,500

Amount of reserve =64,500×10/100=6,450

 

WN 4Calculation of Profit Share of each Partner

Profit available for Distribution = 68,460 + 540 – (` 4,500+` 6,450) = ` 58,050

Profit sharing ratio = 2 : 1

Sajal’s profit share = 58,050×2/3=38700

kajal’s profit share = 58,050×1/3=19350

 

Question 57:


Ali the Bahadur are partners in a firm sharing profits and losses as Ali 70% and Bahadur 30%. Their respective capitals as at 1st April, 2022 stand as Ali  ` 2,50,000 and Bahadur  ` 2,00,000. The partners are allowed interest on capitals @ 5% p.a. Drawings of the partners during the year ended 31st March, 2023 amounted to  ` 35,000 and  ` 25,000 respectively.
Profit for the year, before charging interest on capital and annual salary of Bahadur @ 
` 30,000, amounted to  ` 4,00,000, 10% of divisible profit is to be transferred to Reserve.
You are asked to show Partners' Current Account and Capital Accounts recording the above transactions.

Answer:

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Ali

Bahadur

Particulars

Ali

Bahadur

 

 

 

Balance b/d       

2,50,000

2,00,000

Balance c/d

2,50,000

2,00,000

 

 

 

 

2,50,000

2,00,000

 

2,50,000

2,00,000

 

 

 

 

 

 

 

Partners’ Current Accounts

Dr.

 

Cr.

Particulars

Ali

Bahadur

Particulars

Ali

Bahadur

Drawings A/c           

35,000

25,000

Interest on Capital A/c

1,2500

1,0000

 

 

 

Bahadur’s Salary A/c

-

3,0000

Balance c/d

1,96,420

1,08,830

P/L Appropriation A/c

21,8920

9,3830

 

2,31,420

1,33,830

 

23,1420

13,3830

 

 

 

 

 

 

Working Notes:

WN 1

Profit and Loss Appropriation Account

for the year ended March 31, 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Interest on Capital:

 

Profit and Loss A/c             

4,00,000

Ali

12,500

 

 

 

Bahadur

10,000

22,500

 

 

Reserve

34,750

 

 

Bahadur’s Salary

30,000

 

 

Profit transferred to:

 

 

 

Ali’s Capital A/c

2,18,920

 

 

 

Bahadur’s Capital A/c

93,830

3,12,750

 

 

 

4,00,000

 

4,00,000

 

 

 

 

 

WN 2Calculation of Interest on Capital

Interest on Ali’s capital=2,50,000×5/100=12,500

Interest on Bahadur’s capital=2,00,000×5/100=10,000

 

WN 3Calculation of Amount to be transferred to Reserve
Amount transferred to Reserve=10% of Divisible Profits =10%×(4,00,000-22,500-30,000)=` 34,750

 

WN 4Calculation of Profit Share of each Partner

Profit available for distribution = 4,00,000-` 22,500-` 30,000- ` 3,4750 = ` 31,2750

Ali's Profit Share = 3,12,750×70÷100=2,18,920

Bahadur's Profit Share = 3,12,750×30÷100=93,830

 

Question 58;


Kabir, Zoravar and Parul are partners sharing prohts in the ratio of 5 :3 :2.Their capitals as on 1st April, 2022 were: Kabir- `5,20,000, Zoravar-`3,20,000 and Parul - `2,00,000.

The Partnership Deed provided as follows:

(i) Kabir and Zoravar each will get salary of `24,000 p.a.

(ii) Parul will get commission of 2% of Sales.

(iii) Interest on capital is to be allowed @ 5% p.a.

(iv) Interest on Drawings is to be charged @ 5% p.a.

(v) 10% of Divisible Profit is to be transferred to General Reserve.

Sales for the year ended 31st March, 2023 were `50,00,000. Drawings by each of the partners during the year was `60,000. Net Prom for the year was `1,55,500.

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

 

Answer;

Profit and loss appropriation account year ended 31st March, 2023

Particulars

`

Particulars

`

To Profit transferred

Kabir  -1,60,000×5/20=40,000

Zoravar-1,60,000×4/20=32,000

Parul-1,60,000×11/20=88,000

 

160,000

By  Net profit

By Interest on Drawings

Kabir- 60,000×5/100×5/12=1,500

Zoravar-60,000×5/100×5/12=1,500

Parul-60,000×5/100×5/12=1,500

1,55,500

4,500

 

1,60,000

 

1,60,000

 

Working note;

Profit and loss appropriation account year ended 31st March, 2023

 

Particulars

`

Particulars

`

To Salary

Kabir  -24,000

Zoravar-24,000

To Commission

Parul=50,00,000×2/100=1,00,000

 

To Interest on capital

Kabir  -5,20,000×5/100=26,000

Zoravar-3,20,000×4/20=16,000

Parul-2,00,000×10/20=10,000

 

 

48,000

 

1,00,000

 

 

 

 

52,000

By  Net profit

By Interest on Drawings

Kabir  -60,000×5/100×5/12=1,500

Zoravar-60,000×5/100×5/12=1,500

Parul-60,000×5/100×5/12=1,500

1,55,500

4,500

 

2,00,000

 

1,60,000

 

Ratio of appropriation will be calculated for insufficient profit distribution given below;

Kabir  - Salary + Interest on capital

=24,000+26,000=50,000

Zoravar- Salary + Interest on capital

=24,000+16,000=40,000

Parul- Commission + Interest on capital

=1,00,000+10,000=1,10,000

Ratio of appropriation = 50,000 : 40,000 :1,10,000=5:4:11

 

Question 59:


X and Y entered into partnership on 1st April, 2018. Their capitals as on 1st April, 2022 were ` 2,00,000 and  ` 1,50,000 respectively. On 1st October, 2022, X gave  ` 50,000 as loan to the firm. As per the provisions of the partnership Deed:
(i) 20% of Profits before charging interest on Drawings but after making appropriations to be transferred to General Reserve.
(ii) Interest on capital at 12% p.a. and Interest on Drawings @ 10% p.a.
(iii) X to get monthly salary of 
` 5,000 and Y to get salary of  ` 22,500 per quarter.
(iv) X is entitled to a commission of 5% on sales. Sales for the year were 
` 3,50,000.
(v)  Profit to be shared in the ratio of their capitals up to 
` 1,75,000 and balance equally.
Profit for the year ended 31st March, 2023 before allowing or charging interest was 
` 4,61,000. The drawings of X and Y were  ` 1,00,000 and  ` 1,25,000 respectively.
Pass the necessary Journal entries relating to appropriation out of profit. Prepare Profit and Loss Appropriation Account and the Partners' Capital Accounts.

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
(4,61,000 – 1,500)

4,59,500

  X’s Capital A/c

24,000

 

Interest on Drawings A/c:

 

  Y’s Capital A/c

18,000

42,000

  X’s Capital A/c

5,000

 

X’s Capital A/c (Commission) (3,50,000 × 5%)

17,500

   Y ’s Capital A/c

6,250

11,250

Salary:

 

 

 

  X’s Capital A/c

60,000

 

 

 

  Y’s Capital A/c

90,000

1,50,000

 

 

Reserve (WN 1)

50,000

 

 

Profit transferred to:

 

 

 

  X’s Capital A/c

1,18,125

 

 

 

  Y’s Capital A/c

93,125

2,11,250

 

 

 

4,70,750

 

4,70,750

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

X

( `)

Y

( `)

Particulars

X

( `)

Y

( `)

Drawings A/c

1,00,000

1,25,000

Balance b/d

2,00,000

1,50,000

Interest on Drawings

5,000

6,250

Interest on Capital A/c

24,000

18,000

 

 

 

Salary A/c

60,000

90,000

 

 

 

Commission A/c

17,500

 

Balance c/d

3,14,625

2,19,875

P/L Appropriation A/c

1,18,125

93,125

 

4,19,625

3,51,125

 

4,19,625

3,51,125

 

 

 

 

 

 


Working Notes:

WN1: Calculation of Reserve 

Profit before charging Interest on Drawings but after making appropriations

= 4,59,500 -
`42,000 -`17,500 -`60,000- `90,000= 2,50,000
Reserve = 2,50,000×20100=
` 50,000

WN2: Division of Profit

Partners

Up to ` 1,75,000

` 36,250

(Above ` 1,75,000)

Total

X

1,00,000

18,125

1,18,125

Y

75,000

18,125

93,125

 

Question 60:


Reya, Mona and Nisha shared profits in the ratio of 3 : 2 : 1. The profits for the last three year were  ` 1,40,000;  ` 84,000 and  ` 1,06,000 respectively. These profits were by mistake shared equally for all the give necessary Journal entry for the same.

Answer:

Journal

Particulars

L.F.

Debit

`

Credit

`

Nisha’s Capital A/c

Dr.

 

55,000

 

To Reya’s Capital A/c

 

 

55,000

(Adjustment of profit made)

 

 

 



Working Note:

Total Profits for Last 3 years = 1,40,000 + 84,000 + 1,06,000 = ` 3,30,000

Statement Showing Adjustment

Particulars

Reya

Mona

Nisha

Total

Right Distribution of Profit (3 : 2 :1)

1,65,000

1,10,000

55,000

3,30,000

Wrong Distribution of Profit (1: 1 : 1)

(1,10,000)

(1,10,000)

(1,10,000)

(3,30,000)

Net Effect

55,000

NIL

(55,000)

NIL

 

 

 

 

 

 

 

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
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Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
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