If A, B and C entered into partnership on 1st April 2016 with capitals of Rs. 10,00,000, Rs. 8,00,000 and Rs. 5,00,000 respectively. On 1st July 2016, B advanced Rs. 2,00,000 and on 1st December 2016 C advanced Rs. 1,00,000 by way of loans to the firm.

The Profit and Loss account for the year ended 31.3.2017 disclosed a profit of Rs. 7,70,000 but the partners could not agree upon the rate of interest on loans and the profit sharing ratio. Prepare partner's Capital A/cs and Loan A/cs.

Dear Student

Since PSR and rate of Interest on Loan is not decided, Provisions of Partnership act in case of absence of Partnership deed shall be applied here and Interest would be given @ 6% and Profit and losses shall be shared equally. 
 
Partner's Capital A/c (Fluctuating Capital)
Particulars  A   B   C  Particulars  A   B   C 
        Bal B/d 1,000,000 800,000 500,000
               
               
               
         Profit and loss Appropriation  253,000 253,000 253,000
               
Bal C/d  1,253,000 1,053,000 753,000        
               
  1,253,000 1,053,000 753,000   1,253,000 1,053,000 753,000


 
  Partner's Loan A/c
Date Particulars  A   B   C  Date Particulars  A   B   C 
            Balance b/d 0 0 0
          01-07-16  Bank A/c  0 200,000 0
          01-12-16 Bank A/c 0 0 100,000
          31-03-17 Interest on Loan A/c 0 9,000 2,000
                   
                   
                   
31-03-17 Bal C/d  0 209,000 102,000          
                   
    0 209,000 102,000     0 209,000 102,000


 
Calculation
Profit before Interest   770000
Less: Interest on Loan    
B 2,00,000 x 6% x 9/12 9000
C 1,00,000 x 6% x 4/12 2000
Profit to be distributed to Partners   759000
Share of Profit :    
A 7,59,000 x 1/3 253000
B 7,59,000 x 1/3 253000
C 7,59,000 x 1/3 253000


Regards

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