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12th | Accounting for Partnership Firm – Fundamental | Question No. 61 To 65 | Ts Grewal Solution 2023-2024

Question 61:


Azad and Benny are equal partners. Their capitals are  ` 40,000 and  ` 80,000 respectively. After the accounts for the year had been prepared, it was noticed that interest @ 5% p.a. as provided in the Partnership Deed was not credited to their Capital Accounts before distribution of profits. It is decided to pass an adjustment entry in the beginning of the next year. Record the necessary Journal entry.

Answer:

Interest on Capital
 

Azad

=

40,000 ×

5100

=  ` 2,000

Benny

=

80,000 ×

5100

=  ` 4,000


Adjustment of Profit

 

Azad

Benny

 

Total

Interest on Capital

2,000

4,000

=

6,000

  Less: Wrong distribution of Profit ` 6,000 (1: 1)

(3,000)

(3,000)

=

(6,000)

Adjusted Profit

(1,000)

(1,000)

=

NIL


Adjusting Journal Entry 

Date

Particular

L.F

Debit Amount

( `)

Credit Amount
(
`)

 

Azad's Current A/c

Dr.

 

1,000

 

 

To Benny's Current A/c

 

 

 

1,000

 

(Adjustment of profit made)

 

 

 

 

 

Question 62:


Ram, Mohan and Sohan sharing profits and losses equally have capitals of  ` 1,20,000,  ` 90,000 and  ` 60,000 respectively. For the year ended 31st March, 2023, interest was credited to them @ 6% instead of 5%.
Give adjustment Journal entry.

Answer:

Journal

Particulars

L. F.

Debit

( `)

Credit

( `)

Ram’s Capital A/c

Dr.

 

300

 

To Sohan’s Capital A/c

 

 

300

(Interest on Capital was wrongly credited, now adjusted)

 

 

 

 

 

 

 

Working Notes:

WN 1Calculation of Interest on Capital at 6% p.a.

Interest on Ram’s capital=1,20,000×6/100=7,200

Interest on Mohan’s capital=90,000×6/100=5,400

Interest on Sohan’s capital=60,000×6/100=3,600

 

WN 2Calculation of Interest on Capital at 5% p.a.

Interest on Ram’s capital=1,20,000×5/100=6,000

Interest on Mohan’s capital=90,000×5/100=4,500

Interest on Sohan’s capital=60,000×5/100=3,000

 

WN 3

Statement Showing Adjustment

Particulars

Ram

Mohan

Sohan

Total

Interest on Capital wrongly credited at 6% p.a. reversed

(7,200)

(5,400)

(3,600)

(16,200)

Interest on Capital credited at 5% p.a.

6,000

4,500

3,000

13,500

Wrong Distribution

(1,200)

(900)

(600)

(2,700)

Right Distribution of ` 2,700 (1:1:1)

900

900

900

(2,700)

Net Effect

(300)

NIL

300

NIL

 

 

 

 

 

 

 

Question 63:


Ram, Shyam and Mohan were partners in a firm sharing profits and losses in the ratio of 2 : 1 : 2. Their capitals were fixed at  ` 3,00,000,  ` 1,00,000,  ` 2,00,000. For the year ended 31st March, 2023, interest on capital was credited to them @ 9% instead of 10% p.a. The profit for the year before charging interest was  ` 2,50,000.
Show your working notes clearly and pass necessary adjustment entry.

Answer:

 

Journal

Date

Particulars

L.F.

Debit

( `)

Credit

( `)

2023
March 31


Shyam’s Current A/c


Dr.

 


200

 

 

Mohan’s Current A/c

Dr.

 

400

 

 

To Ram’s Current A/c

 

 

600

 

(Interest on Capital adjusted)

 

 

 

 

 

 

 

 

Working Notes:

 

WN 1 Calculation of Interest on Capital 10% p.a.

Interest on Ram’s capital=3,00,000×10/100=30,000

Interest on Shyam’s capital=1,00,000×10/100=10,000

Interest on Mohan’s capital=2,00,000×10/100=20,000

 

WN 2 Calculation of Interest on Capital 9% p.a.

Interest on Ram’s capital=3,00,000×9/100=2,7000

Interest on Shyam’s capital=1,00,000×9/100=9,000

Interest on Mohan’s capital=2,00,000×9/100=18,000

 

WN 3

Statement Showing Adjustment

Particulars

Ram

Shyam

Mohan

Total

Interest on Capital credited at 10% p.a.

30,000

10,000

20,000

60,000

Interest on Capital wrongly credited at 9% p.a. reversed

(27,000)

(9,000)

(18,000)

(54,000)

Right distribution

3,000

1,000

2,000

6,000

Wrong distribution of ` 6,000 (2 : 1 : 2)

(2,400)

(1,200)

(2,400)

(6,000)

Net Effect

600

(200)

(400)

NIL

 

 

 

 

 

 

Question 64:


Profit earned by a partnership firm for the year ended 31st March, 2023 were distributed equally between the partners – Pankaj and Anu – without allowing interest on capital. Interest due on capital was Pankaj –  ` 3,000 and Anu –  ` 1,000.
Pass necessary adjustment entry.

Answer:

Journal

Date

Particulars

L.F.

Debit

( `)

Credit

( `)

 

Anu’s  Capital A/c

Dr.

 

1,000

 

 

To Pankaj’s Capital A/c

 

 

1,000

 

(Adjustment of omission of Interest on Capital)

 

 

 

 

 

 

 

 

Working Note:

Statement Showing Adjustment

Particulars

Pankaj

Anu

Total

Interest on Capital to be credited

3,000

1,000

4,000

Profit wrongly distributed equally to be debited

(2,000)

(2,000)

(4,000)

Net Effect

1,000

(Cr.)

1,000

(Dr.)

NIL

 

 

 

 

 

Question 65: Ram, Mohan and Sohan were partners sharing profits in the ratio of 2:1:1. Ram withdrew `3,000 every month and Mohan withdrew `4,000 every month. Interest on drawings @ 6% p.a. was charged, whereas the partnership deed was silent about interest on drawings.


Showing your working clearly, pass the necessary adjustment entry to rectify the error.

Answer:

Particulars

`

`

Ram’s Capital A/c   Dr,

Mohan’s Capital A/c   Dr,

            To Sohan’s Capital A/c

(Being interest on Drawing Charged Wrongly, now Rectified)

180

630

 

 

810

 

Working notes:

WN1:

Table of Adjustments

 

Ram

Mohan

Sohan

Interest on Drawing Wrongly Debited

1,080

-

1,440

Profits to be credited

1,260

630

630

Amount to adjusted

180(Dr.)

630(Dr.)

810(Cr.)

 

WN2: Interest on Drawing Wrongly Debited

Ram’s Interest on Drawing= 36,000×6/100×6/12=1,080

Sohan’s Interest on Drawing= 48,000×6/100×6/12=1,440

 

WN3:Profits to be credited (1,080+1,440=2,120)

Ram =  2,520×2/4=1,260

Mohan =2,520×1/4=630

Sohan = =2,520×1/4=630

 

 

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