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12th | Accounting for Partnership Firm – Fundamental | Question No. 81 To 85 | Ts Grewal Solution 2023-2024

Question 81:


X, Y and Z entered into partnership on 1st October, 2022 to share profits in the ratio of 4 : 3 : 3. X, personally guaranteed that Z's share of profit after charging interest on capital @ 10% p.a. would not be less then ` 80,000 in any year. Capital contributions were: X  ` 3,00,000, Y  ` 2,00,000 and Z  ` 1,50,000.
Profit for the year ended 31st March, 2023 was  ` 1,60,000. 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:                     

 

Net Profit b/d                       

1,60,000

X’s Capital a/c

15,000

 

 

 

Y’s Capital a/c

10,000

 

 

 

Z’s Capital a/c

7,500

32,500

 

 

 

 

 

 

Profit transferred to:

 

 

 

X (51,000 – 1,750)

49,250

 

 

 

  Y (38,250)

38,250

 

 

 

Z (38,250 + 1,750)

40,000

1,27,500

 

 

 

1,60,000

 

1,60,000

 

 

 

 

 

 

 

 

Note: Since Z is admitted on 1st October, 2022 and Profit is ascertained on March 31, 2023, therefore, interest on capital is calculated for 6 months and guaranteed amount is considered as ` 40,000 (half of the total amount).

 

Question 82:


A, B and C are partners sharing profits in the ratio of 5 : 4 : 1. C is given a guarantee that his minimum share of profit in any given year would be at least  ` 50,000. Deficiency, if any, would be borne by A and B equally. Profit for the year ended 31st March 2023 was  ` 4,00,000.
Pass necessary Journal entries in the books of the firm.

Answer:

Profit and Loss Appropriation Account

for the year ended 2023

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Profit transferred to:                  

 

Profit and Loss A/c (Net Profit)

4,00,000

   A’s Capital A/c

1,95,000

 

 

 

   B’s Capital A/c

1,55,000

 

 

 

   C’s Capital A/c

50,000

4,00,000

 

 

 

4,00,000

 

4,00,000

 

 

 

 


Working Notes:

Profit for the year = ` 4,00,000

Profit sharing ratio = 5 : 4 : 1

C is given a guarantee of minimum profit of ` 50,000

A’s profit share =4,00,000×5/10=2,00,000

B’s profit share =4,00,000×4/10=1,60,000

C’s profit share =4,00,000×1/10=40,000

Deficiency in C’s share = 5,000 ` 4,000 = ` 1,000

This deficiency is to be borne by A and B equally.

Deficiency is to be borne by A=10,000×1/2=5,000

Deficiency is to be borne by B=10,000×1/2=5,000

Therefore,

Final Profit Share of A = 2,00,000 – 5,000 = ` 1,95,000

Final Profit Share of B = 1,60,000 -5,000 = ` 1,55,000

Final Profit Share of C = 40,000 + 10,000 = ` 50,000

 

Question 83:Atul, Bipul and Charu are partners sharing profits equally. Bipul is guaranteed minimum profit of `2,00,000 per annum. Salary is payable to Bipul of `10,000 per month. Net Profit for the year ended 31st March, 2023 is `6,60,000.


Prepare Profit & Loss Appropriation Account for the year.

Answer:

Profit & Loss Appropriation A/c

Particulars

`

Particulars

`

To Bipul’s Capital A/C (Salary)

1,20,000

By Profit and loss a/c

6,60,000

To Profit transferred to:

 

(Profit)

 

Atul’s Capital A/c

1,70,000

 

 

Bipul’s Capital A/c

2,00,000

 

 

Charu’s Capital A/c

1,70,000

 

 

 

6,60,000

 

6,60,000

Working Notes:

Profit after Bipul’s salary = 6,60,000 -1,20,000

Divisible Profit = 5,40,000

Share of Profits mas per profit sharing ratio 1:1:1

= 5,40,000÷3= 1,80,000

Guarantee of profit = 2,00,000

Deficiency of profit =2,00,000-1,80,000= 20,000

Deficiency of profit will be adjusted by Atul and Charu in 1:1

= 20,000÷2=10,000

Adjustment Table of Profit

Partner

Atul

Bipul

Charu

Share of Profits mas per profit sharing ratio 1:1:1

1,80,000

1,80,000

1,80,000

Adjustment of Profit

(-) 10,000

(+) 20,000

(-) 10,000

Final share of profit

1,70,000

2,00,000

1,70,000

 

 

Question 84:Parul, Prerna and Kaushal are partners sharing profits equally. Parul is guaranteed minimum annual profit of `2,00,000. Kaushal is to get Commission@ 5% of Net Sales and the commission is determined at `50,000.


Net Profit for the year ended 31st March, 2023 is ` 2,50,000.

Prepare Profit & Loss Appropriation Account for the year.

Answer:

Profit & Loss Appropriation A/c

Particulars

`

Particulars

`

To Kaushal’s Capital A/c

50,000

By Profit and loss a/c

2,50,000

(commission)

 

(Profit)

 

To Parul’s Capital A/c

2,00,000

 

 

(Profit transferred)

 

 

 

 

2,50,000

 

2,50,000

Working Notes:

Share of each partner 2,00,000÷3=66,666.67

Note: Share of each partner is less than guarantee but divisible profit is equal to guarantee, hence whole divisible profit should be credited to parul’s Capital A/c

 

Question 85:Nimrat, Maira and Kabir are partners sharing profits in the ratio of 2:2:1.Nimrat is guaranteed minimum profit of `1,60,000 per annum. Net Profit for the year ended 31st March, 2023 is `1,00,000.


Prepare Profit & Loss Appropriation Account for the year.

Answer:

Profit & Loss Appropriation A/c

Particulars

`

Particulars

`

To Nimrat’s Capital A/c

1,60,000

By Profit and loss a/c

1,00,000

(Profit transferred)

 

(Profit)

 

 

 

By Loss transferred to;

 

 

 

Maira’s Capital A/c

40,000

 

 

 

Kabir’s Capital A/c

20,000

60,000

 

 

 

 

 

 

2,50,000

 

2,50,000

 

Note: Loss will be born by Maira and Kabirin  2:1, Since Nimrat is guaranteed minimum share of profit of 1,60,000.

Maira = 60,000×2÷3=40,000

Kabir = 60,000×1÷3=20,000

 

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
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