commercemine.com

12th | Accounting for Partnership Firm – Fundamental | Question No. 86 To 90 | Ts Grewal Solution 2023-2024

Question 86: Ashmit, Abbas and Karman are partners sharing profits in the ratio of 3:2:1.Abbas is guaranteed minimum profit of `1,50,000 per annum. The firm incurred loss for the year ended 31st March, 2023 of `30,000.


Prepare Profit & Loss Appropriation Account for the year.

Answer:

 

Profit & Loss Appropriation A/c

Particulars

`

Particulars

`

To Profit and loss a/c

30,000

 

 

(Loss transferred from P&L account)

 

 

 

To Abbas’s Capital A/c

1,50,000

By Loss transferred to;

 

(Profit transferred)

 

Ashmit’s Capital A/c

1,35,000

 

 

 

Karman’s Capital A/c

45,000

1,80,000

 

 

 

 

 

 

1,80,000

 

1,80,000

 

Working notes:

Note: Loss will be borne by Ashmitand Karmanin  3:1, Since Abbas is guaranteed minimum share of profit of 1,50,000.

Ashmit= 1,80,000×3÷4= 1,35,000

Karman= 1,80,000×1÷4= 45,000

 

Question 87:


P, Q and R entered into partnership on 1st April, 2018 to share profits and losses in the ratio of 12 : 8 : 5. It was provided that in no case R's share in profit be less then ` 30,000 p.a. The profits and losses for the period ended 31st March were: 2021 Profit  ` 1,20,000 2022 Profit  ` 1,80,000; 2023 Loss  `1,20,000.
Pass the necessary Journal entries in the books of the firm.

Answer:

Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

 

 

 

 

 

 

2021

P’s Capital A/c

Dr.

 

3,600

 

 

Q’s Capital A/c

Dr.

 

2,400

 

 

        To R’s Capital A/c

 

 

 

6,000

 

(Deficiency adjusted)

 

 

 

 

 

 

 

 

 

 

2023

P’s Capital A/c

Dr.

 

32,400

 

 

Q’s Capital A/c

Dr.

 

21,600

 

 

        To R’s Capital A/c

 

 

 

54,000

 

(Deficiency adjusted)

 

 

 

 

 

 

 

 

 

 

 

Working Notes:

WN1: Calculation of amount of deficiency of R
R's Minimum Guaranteed Profit = ` 30,000 for 2021

R's actual share of profit = 1,20,000 ×12/25=` 24,000

Deficiency in R's Profit = 30,000 - 24,000 = ` 6,000

This deficiency is to be borne by P & Q in the ratio of 12:8.For 2022, 

R's actual share of profit = 1,80,000×8/25=` 36,000

This implies that there is no deficiency in R's profit share as his actual share exceeds his minimum guaranteed share. For 2023,

 R's share of loss = 1,20,000×5/25=` 24,000

Deficiency in R's Profit = 30,000 + 24,000 = ` 54,000

This deficiency is to be borne by P & Q in the ratio of 12:8.

Question 88: P and Q were partners in a firm sharing profits in the ratio of 5:3. On 1st April, 2022 they admitted R as a new partner for 1/8th share in the profits with a guaranteed profit of 75,000. The new profit-sharing ratio between P and Q will remain the same but they agreed to bear any deficiency on account of guarantee to R in the ratio of 3:2. The profit of the firm for the year ended 31st March, 2023 was 4,00,000.


Prepare Profit & Loss Appropriation Account of P, Q and R for the year ended 31st March, 2023.

Answer:

Profit & Loss Appropriation A/c

Particulars

Rs.

Particulars

Rs.

To profit transferred to;

4,00,000

By Profit & Loss A/c

4,00,000

P’s capital A/c

 

 

 

Q’s capital A/c

 

 

 

R’s capital A/c

 

 

 

 

4,00,000

 

4,00,000

1. Share profit according to profit sharing ratio

Profit share of R 4,00,000×1/8=50,000

Share of P and Q in remaining profit 4,00,000-50,000=3,50,000

P’s share= 3,50,000×5/8=2,18,750

Q’s share= 3,50,000×3/8=1,31,250

 

2. Deficiency of profit

R’s Deficiency is the share of profit 75,000-50,000=25,000

 

3. Deficiency shared as follow by P and Q in 3:2

P=25,000×3/5=15,000

Q=25,000×2/5=10,000

 

4. Adjustment table of guarantee profit

 

P

Q

R

Profit as per ratio

2,18,750

1,31,250

50,000

Adjustment of guarantee

-15,000

-10,000

+25,000

 

2,03,750

1,21,250

75,000

 

 

Question 89:


A and B are in partnership sharing profits and losses in the ratio of 3 : 2. They admit C, their Manager, as a partner with effect from 1st April, 2022, for 1/4th share of profits.
C, while a Manager, was in receipt of a salary of 
` 27,000 p.a. and a commission of 10% of the net profits after charging such salary and commission.
In terms of the Partnership Deed, any excess amount, which C will be entitled to receive as a partner over the amount which would have been due to him if he continued to be the manager, would have to be personally borne by A out of his share of profit. Profit for the year ended 31st March, 2023 amounted to 
` 2,25,000.

You are required to show Profit and Loss Appropriation Account for the year ended 31at March, 2023.

Answer:

Profit and Loss Appropriation Account

for the year and March 31, 2023

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Profit transferred to:

 

Profit and Loss A/c            

2,25,000

A’s Capital A/c

96,750

 

 

 

B’s Capital A/c

72,000

 

 

 

C’s Capital A/c

56,250

2,25000

 

 

 

2,25000

 

2,25000

 

 

 

 


Working Notes:

WN 1Calculation of Remuneration to C as a Manager

Salary to C = ` 27,000

Commission to C = 10% of Net Profit after Salary and Commission

Net Profit after Salary and Commission = 2,25,000- 27,000 = ` 1,98,000

C’s commission = 1,98,000×10/110=18,000

C’s remuneration as Manager = Salary + Commission = 27,000 + 18,000 = ` 45,000

WN 2Calculation of Profit Share of C as a Partner

Profit = ` 2,25,000

C’s profit share = 2,25,000×1/4=56,250

Part of C’s Profit Share to be borne by A = 56,250 -` 45,000 = ` 11,250

Profit available for distribution between A and B = 2,25,000 45,000 = ` 1,80,000

A’s profit share = 1,80,000×3/5=1,08,000

C’s profit share = 1,80,000×2/5=72,000

A’s Profit share after adjusting C’s deficiency = 1,08,000-` 11,250 = ` 96,750

 

Question 90:


Asgar, Chaman and Dholu are partners in a firm. Their Capital Accounts stood at  ` 6,00,000;  ` 5,00,000 and  ` 4,00,000 respectively on 1st April, 2022. They shared Profits and Losses in the proportion of 4 : 2 : 3. Partners are entitled to interest on capital @ 8% per annum and salary to Chaman and Dholu@  ` 7,000 per month and  ` 10,000 per quarter respectively as per the provision of the Partnership Deed. Sholu's share of profit (excluding interest on capital but including salary) is guaranteed at a minimum of ` 1,10,000 p.a. Any deficiency arising on that account shall be met by Asgar. The profit for the year ended 31st March, 2023 amounted to  ` 4,24,000.(Delhi 2013, Modified)
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2023.

Answer:

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

Dr.

 

 

 

Cr.

Particulars

 

`

Particulars

`

Interest on Capital to:

 

 

Profit and Loss A/c (Net Profit)

4,24,000

Asgar’s Capital A/c

48,000

 

 

 

Chaman’s Capital A/c

40,000

 

 

 

Dholu’s Capital A/c

32,000

1,20,000

 

 

 

 

 

 

Salary to Chaman (` 7,000 × 12)

84,000

 

 

Salary to Dholu (` 10,000 × 4)

40,000

 

 

 

 

 

 

Profit transferred to:

 

 

 

Asgar’s Capital A/c

70,000

 

 

 

Chaman’s Capital A/c

40,000

 

 

 

Dholu’s Capital A/c

70,000

1,80,000

 

 

 

 

4,24,000

 

4,24,000

 

 


Working Notes:

Profit available for distribution =  4,24,000 – (1,20,000 + 84,000+ 40,000) = `1,80,000
Profit sharing ratio = 4 : 2 : 3

Asgar’s profit share = 1,80,000×4/9=80,000

Chaman’s profit share = 1,80,000×2/9=40,000

Dhalu’s profit share = 1,80,000×3/9=60,000


Dholu’s Minimum Guaranteed Profit =
` 1,10,000 (excluding interest on capital, but including salary)
Dholu’s Minimum Guaranteed Profit (excluding salary) = 1,10,000 – 40,000 =
` 70,000
But, Dholu’s Actual Profit Share =
`60,000
Deficiency in Dholu’s Profit Share = 70,000 – 60,000 = 10,000
This deficiency is to be borne by Asgar alone.
Therefore,
Asgar’s New Profit Share =  80,000 – 10,000 =
` 70,000

 

 

Ts Grewal Solution 2023-2024

Click below for more Questions

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