12th | Accounting for Partnership Firms – Fundamentals| Question No. 31 To 35 | Ts Grewal Solution 2024-2025

Calculation of Interest on Amit’s Capital

Date	Capital	×	Period	=	Product
April 01, 2023 to Sept. 30, 2023	15,00,000	×	6	=	90,00,000
Oct. 01, 2023 to March 31, 2023	12,00,000	×	6	=	72,00,000
Sum of Product					1,62,00,000

Interest on Capital = sum of product×Rate of drawing/100×1/ 12

Interest on Capital =1,62,00,000×8/100×1/12  =1,08,000

 

Calculation of Interest on Bramit’s Capital

Date	Capital	×	Period	=	Product
April 01, 2023 to Sept. 30, 2023	9,00,000	×	6	=	54,00,000
Oct. 01, 2023 to March 31, 2023	12,00,000	×	6	=	72,00,000
Sum of Product					1,26,00,000

Interest on Capital = sum of product×Rate of drawing/100×1/ 12

Interest on Capital =1,26,00,000×8/100×1/12  =84,000

 

Question 32:

Moli and Bholicontribute  ` 20,000 and  `  10,000 respectively towards capital. They decide to allow interest on capital @ 6% p.a. Their respective share of profits is 2 : 3 and the net profit for the year is  ` 1,500. Show distribution of profits:
(i) where there is no agreement except for interest on capitals; and
(ii) where there is an agreement that the interest on capital as a charge.

Calculation of Interest on Capital

Interest on Moli's Capital= 20,000×6/100=1,200

Interest on Bholi's Capital=10,000×6/100=600

Total Amount of Interest on Capital=1,200+600=1,800

Case (a) 

Where there is no clean agreement except for interest on capitals

Profit for the year ended =  `  1,500

Total amount of interest =  `  1,800

Here, total amount of interest on capital is more than the profit available for distribution. Therefore, profit of ` 1,500 is distributed between Moli and Bholi in the ratio of their interest on capital.

Particulars	Moli	:	Bholi
Interest on Capital	1,200	:	600
or, Ratio of interest on Capital	2	:	1

Moli will get Interest on Capital=1,500×2/3=1,000

Bholi will get Interest on Capital=1,500×1/3=500

Case (b)

In case, there is a clear agreement that the interest on capital will be allowed even if the firm has incurred loss, then the whole amount of interest on capital is to be allowed to the partners.

Interest on Moli's Capital=20,000×6/100=1,200

Interest on Bholi's Capital=10,000×6/100=600

Total Amount of Interest on Capital =(1,200+600)=1,800

Total Profit of the firm =  `  1,500

Therefore, loss to the firm amounts to  `300. This loss is to be shared by Moli and Bholi in their profit sharing ratio that is 2 : 3. 

Loss to Moli=300×2/5= 120

Loss to Bholi=300×3/5=180

 

Question 33:

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

 

Question 34:

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

 

Question 35:

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, 2024. 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, 2024
Dr.					Cr.
Particulars			`		Particulars		`
Partners’ Commission:					Profit and Loss A/c (Net Profit)		1,80,000
A’s Capital A/c	6,000
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