Double Entry Book Keeping Ts Grewal %282016%29 Solutions for Class 12 Commerce Accountancy Chapter 2 Partnership Accounts are provided here with simple step-by-step explanations. These solutions for Partnership Accounts are extremely popular among class 12 Commerce students for Accountancy Partnership Accounts Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal %282016%29 Book of class 12 Commerce Accountancy Chapter 2 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Double Entry Book Keeping Ts Grewal %282016%29 Solutions. All Double Entry Book Keeping Ts Grewal %282016%29 Solutions for class 12 Commerce Accountancy are prepared by experts and are 100% accurate.

Page No 2.78:

Question 1:

Answer:

Yes, A has contravened the provisions of Partnership law. In the absence of Partnership deed, the following  provisions of Indian Partnership Act, 1932 applies:

(a) Remuneration is not payable to any of the partners, therefore Salary to both A and B will not be provided.
(b) Interest on Capital is not allowed to any of the partners, therefore, it should not be provided to both A and B.
(c) Interest on loan @ 6% p.a. is a charge against profit and should have been debited to Profit and Loss A/c. Similarly, Rent is a charge and it should also be debited to Profit and Loss A/c.
(d) Profit (after charging interest on loan @ 6% p.a. and rent) is to be distributed equally.
 
Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Profit transferred to:  
Profit and Loss A/c (Net Profit)
51,000
A’s Capital A/c
25,500   (60,000 – 6,000 – 3,000)  
B’s Capital A/c
25,500 51,000    
  51,000   51,000
       

Page No 2.78:

Question 2:

Yes, A has contravened the provisions of Partnership law. In the absence of Partnership deed, the following  provisions of Indian Partnership Act, 1932 applies:

(a) Remuneration is not payable to any of the partners, therefore Salary to both A and B will not be provided.
(b) Interest on Capital is not allowed to any of the partners, therefore, it should not be provided to both A and B.
(c) Interest on loan @ 6% p.a. is a charge against profit and should have been debited to Profit and Loss A/c. Similarly, Rent is a charge and it should also be debited to Profit and Loss A/c.
(d) Profit (after charging interest on loan @ 6% p.a. and rent) is to be distributed equally.
 
Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Profit transferred to:  
Profit and Loss A/c (Net Profit)
51,000
A’s Capital A/c
25,500   (60,000 – 6,000 – 3,000)  
B’s Capital A/c
25,500 51,000    
  51,000   51,000
       

Answer:

In the absence of Partnership deed:

(a) Interest on Loan is to be provided at 6% p.a.
(b) Since, rent is a charge against profit, thus, it will be debited to Profit & Loss Account
(c) Profit after interest on loan @ 6% p.a. and rent is to be distributed equally between the partners.
 
Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs. Particulars Amount Rs.
Profit transferred to:   Profit and Loss A/c 1,22,750
X’s Capital A/c
61,375   (1,50,000 – 25,000 – 2,250)  
Y’s Capital A/c
61,375 1,22,750    
  1,22,750   1,22,750
       

Working Notes: Calculation of Interest on X’s Loan
Interest on Loan (from Oct. 01, 2015 to Mar. 31, 2016) = 75,000 × 6100 × 612=Rs 2,250

Page No 2.78:

Question 3:

In the absence of Partnership deed:

(a) Interest on Loan is to be provided at 6% p.a.
(b) Since, rent is a charge against profit, thus, it will be debited to Profit & Loss Account
(c) Profit after interest on loan @ 6% p.a. and rent is to be distributed equally between the partners.
 
Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs. Particulars Amount Rs.
Profit transferred to:   Profit and Loss A/c 1,22,750
X’s Capital A/c
61,375   (1,50,000 – 25,000 – 2,250)  
Y’s Capital A/c
61,375 1,22,750    
  1,22,750   1,22,750
       

Working Notes: Calculation of Interest on X’s Loan
Interest on Loan (from Oct. 01, 2015 to Mar. 31, 2016) = 75,000 × 6100 × 612=Rs 2,250

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on X’s Capital

1,25,000

Profit and Loss A/c

2,00,000

Y’s Salary

75,000

 

 

 

2,00,000

 

2,00,000

 

 

 

 

Working Note:

Interest on X's Capital = 50,00,000 × 8100=Rs 4,00,000
Salary to Y @ 20,000 p.m = Rs 2,40,000

Total appropriation to be made = 4,00,000 + 2,40,000 = Rs 6,40,000

Profit earned during the year = 2,00,000

Here, profit available for distribution (i.e. Rs 2,00,000) is less than the sum total of Interest on Capital and Salary (i.e. Rs 6,40,000).

Therefore, profit will be distributed in the ratio of Interest on Capital and Salary.

                    Interest on X's Capital : Y's Salary                                         4,00,000   :   2,40,000Ratio                                         10    :   6

Interest on X's Capital = 2,00,000 × 1016=Rs 1,25,000Y's Salary = 2,00,000  × 616=Rs 75,000

Note: The answer provided in the book is incorrect as interest on capital will only to be provided to X since he has contributed the capital amount.

Page No 2.78:

Question 4:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on X’s Capital

1,25,000

Profit and Loss A/c

2,00,000

Y’s Salary

75,000

 

 

 

2,00,000

 

2,00,000

 

 

 

 

Working Note:

Interest on X's Capital = 50,00,000 × 8100=Rs 4,00,000
Salary to Y @ 20,000 p.m = Rs 2,40,000

Total appropriation to be made = 4,00,000 + 2,40,000 = Rs 6,40,000

Profit earned during the year = 2,00,000

Here, profit available for distribution (i.e. Rs 2,00,000) is less than the sum total of Interest on Capital and Salary (i.e. Rs 6,40,000).

Therefore, profit will be distributed in the ratio of Interest on Capital and Salary.

                    Interest on X's Capital : Y's Salary                                         4,00,000   :   2,40,000Ratio                                         10    :   6

Interest on X's Capital = 2,00,000 × 1016=Rs 1,25,000Y's Salary = 2,00,000  × 616=Rs 75,000

Note: The answer provided in the book is incorrect as interest on capital will only to be provided to X since he has contributed the capital amount.

Answer:

Calculation of Interest on Capital

Case (a) 

Where there is no clean agreement except for interest on capitals

Profit for the year ended = Rs 1,500

Total amount of interest = Rs 1,800

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

Particulars

   X

:

Y

Interest on Capital

1,200

:

600

or, Ratio of interest on Capital

2

:

1

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.

Total Profit of the firm = Rs 1,500

Total amount of Interest on Capital = Rs 1,800 (i.e. Rs 1,200 + Rs 600). Therefore, loss to the firm amounts to Rs 300. This loss is to shared by X and Y in their profit sharing ratio that is 2 : 3. 



Page No 2.79:

Question 5:

Calculation of Interest on Capital

Case (a) 

Where there is no clean agreement except for interest on capitals

Profit for the year ended = Rs 1,500

Total amount of interest = Rs 1,800

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

Particulars

   X

:

Y

Interest on Capital

1,200

:

600

or, Ratio of interest on Capital

2

:

1

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.

Total Profit of the firm = Rs 1,500

Total amount of Interest on Capital = Rs 1,800 (i.e. Rs 1,200 + Rs 600). Therefore, loss to the firm amounts to Rs 300. This loss is to shared by X and Y in their profit sharing ratio that is 2 : 3. 

Answer:

(i) When Partnership deed is silent about the treatment of Interest on Capital:
 

Profit and Loss Appropriation Account
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Interest on Capital: (WN i)   Profit and Loss A/c (Net Profit) 60,000
X’s Capital A/c
40,000      
Y’s Capital A/c
20,000 60,000    
  60,000   60,000
       


(ii) When interest is a charge as per the Partnership Deed

 

Profit and Loss Appropriation Account
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Interest on Capital:   Profit and Loss A/c (Net Profit) 60,000
X’s Capital A/c
48,000      
Y’s Capital A/c
24,000 72,000 Loss transferred to:  
   
X’s Capital A/c
7,200
 
   
Y’s Capital A/c
4,800 12,000
  72,000   72,000
       

Working Notes: Calculation of Interest on Capital
X=8,00,000×6100=Rs 48,000Y=4,00,000×6100=Rs 24,000Total                          Rs 72,000

(i)  Since, partnership deed is silent regarding the treatment of interest on capital, therefore, it will be treated as an appropriation out of profits and interest will be allowed to extent of available profits.
X=48,00072,000×60,000=Rs 40,000Y=24,00072,000×60,000=Rs 20,000

(ii) Interest is to be treated as a charge against profits, thus, full amount of interest on capital is to be provided.

Page No 2.79:

Question 6:

(i) When Partnership deed is silent about the treatment of Interest on Capital:
 

Profit and Loss Appropriation Account
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Interest on Capital: (WN i)   Profit and Loss A/c (Net Profit) 60,000
X’s Capital A/c
40,000      
Y’s Capital A/c
20,000 60,000    
  60,000   60,000
       


(ii) When interest is a charge as per the Partnership Deed

 

Profit and Loss Appropriation Account
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Interest on Capital:   Profit and Loss A/c (Net Profit) 60,000
X’s Capital A/c
48,000      
Y’s Capital A/c
24,000 72,000 Loss transferred to:  
   
X’s Capital A/c
7,200
 
   
Y’s Capital A/c
4,800 12,000
  72,000   72,000
       

Working Notes: Calculation of Interest on Capital
X=8,00,000×6100=Rs 48,000Y=4,00,000×6100=Rs 24,000Total                          Rs 72,000

(i)  Since, partnership deed is silent regarding the treatment of interest on capital, therefore, it will be treated as an appropriation out of profits and interest will be allowed to extent of available profits.
X=48,00072,000×60,000=Rs 40,000Y=24,00072,000×60,000=Rs 20,000

(ii) Interest is to be treated as a charge against profits, thus, full amount of interest on capital is to be provided.

Answer:

Interest on capital is calculated on the opening balance of partner’s capital.

Calculation of Capital balance at the beginning

Particulars

Ram

Mohan

Capital at the end

24,000

18,000

Less: Profit already credited (1:1)

(8,000)

(8,000)

Add: Drawings already debited

4,000

6,000

Capital at the beginning

20,000

16,000

 

 

 

Page No 2.79:

Question 7:

Interest on capital is calculated on the opening balance of partner’s capital.

Calculation of Capital balance at the beginning

Particulars

Ram

Mohan

Capital at the end

24,000

18,000

Less: Profit already credited (1:1)

(8,000)

(8,000)

Add: Drawings already debited

4,000

6,000

Capital at the beginning

20,000

16,000

 

 

 

Answer:

Assuming the capitals of the partners are fixed, interest on capital will be calculated on their fixed capital (i.e. Rs 24,000 for Ram and Rs 18,000 for Mohan)

Interest on Ram's Capital = 24,000 × 5100=Rs 1,200Interest on Mohan's Capital = 18,000 × 5100= Rs 900

Page No 2.79:

Question 8:

Assuming the capitals of the partners are fixed, interest on capital will be calculated on their fixed capital (i.e. Rs 24,000 for Ram and Rs 18,000 for Mohan)

Interest on Ram's Capital = 24,000 × 5100=Rs 1,200Interest on Mohan's Capital = 18,000 × 5100= Rs 900

Answer:

Calculation of Interest on B’s Capital

Particulars

Amount

Rs

B’s Capital balance as on March 31, 2016

40,000

Less: Profit adjusted in B’s Capital

(5,000)

Add: Drawings

15,000

Capital Balance at the beginning (as on April 01, 2015)

50,000

 

 

Interest on B's Capital = Capital at the beginning × Rate100                                   = 50,000 × 6100= Rs 3,000

Page No 2.79:

Question 9:

Calculation of Interest on B’s Capital

Particulars

Amount

Rs

B’s Capital balance as on March 31, 2016

40,000

Less: Profit adjusted in B’s Capital

(5,000)

Add: Drawings

15,000

Capital Balance at the beginning (as on April 01, 2015)

50,000

 

 

Interest on B's Capital = Capital at the beginning × Rate100                                   = 50,000 × 6100= Rs 3,000

Answer:

Calculation of opening capital balance
 

Particulars X Y
Capital at the end 10,000 8,000
Less: Profit already credited 6,000-4,000×12
(1,000) (1,000)
Add: Drawings already debited
  3,000
Opening Capital 9,000 10,000

Interest on X’s Capital =9,000×5100=Rs 450Interest on Y’s Capital =10,000×5100=Rs 500

Page No 2.79:

Question 10:

Calculation of opening capital balance
 

Particulars X Y
Capital at the end 10,000 8,000
Less: Profit already credited 6,000-4,000×12
(1,000) (1,000)
Add: Drawings already debited
  3,000
Opening Capital 9,000 10,000

Interest on X’s Capital =9,000×5100=Rs 450Interest on Y’s Capital =10,000×5100=Rs 500

Answer:

Calculation of Interest on Capital

Interest on Gee's Capital=3,00,000×6100=Rs 18,000Interest on Ess's Capital=3,00,000×6100=Rs 18,000


Calculation of Interest on Current Account Balances

Interest on Gee's Current Account Balance=1,00,000×6100=Rs 6,000Interest on Ess's Current Account Balance=2,00,000×6100=Rs 12,000

Page No 2.79:

Question 11:

Calculation of Interest on Capital

Interest on Gee's Capital=3,00,000×6100=Rs 18,000Interest on Ess's Capital=3,00,000×6100=Rs 18,000


Calculation of Interest on Current Account Balances

Interest on Gee's Current Account Balance=1,00,000×6100=Rs 6,000Interest on Ess's Current Account Balance=2,00,000×6100=Rs 12,000

Answer:

Calculation of Interest on Capital

Interest on Emm's Capital=5,00,000×6100=Rs 30,000Interest on EII's Capital=6,00,000×6100=Rs 36,000


Calculation of Interest on Current Account Balances

Interest allowed on Emm's Current Account Balance=1,00,000×6100=Rs 6,000 (Credit)Interest charged on EII's Current Account Balance=1,00,000×6100=Rs 6,000 (Debit)



Page No 2.80:

Question 12:

Calculation of Interest on Capital

Interest on Emm's Capital=5,00,000×6100=Rs 30,000Interest on EII's Capital=6,00,000×6100=Rs 36,000


Calculation of Interest on Current Account Balances

Interest allowed on Emm's Current Account Balance=1,00,000×6100=Rs 6,000 (Credit)Interest charged on EII's Current Account Balance=1,00,000×6100=Rs 6,000 (Debit)

Answer:

Calculation of Interest on Capital

Interest on A's Capital=2,00,000×5100=Rs 10,000Interest on B's Capital=2,50,000×5100=Rs 12,500


Calculation of Opening Current Account Balances

For A

Closing Current Account Balance

40,000

Add: Drawings

36,000

Less: Profit Share

30,000

Opening Current Account Balance

46,000

 

For B

Closing Current Account Balance

(50,000)

Add: Drawings

36,000

Less: Profit Share

30,000

Opening Current Account Balance

(44,000)


Calculation of Interest on Current Account Balances

Interest allowed on A's Current Account Balance=46,000×5100=Rs 2,300 (Credit)Interest charged on B's Current Account Balance=44,000×5100=Rs 2,200 (Debit)

Page No 2.80:

Question 13:

Calculation of Interest on Capital

Interest on A's Capital=2,00,000×5100=Rs 10,000Interest on B's Capital=2,50,000×5100=Rs 12,500


Calculation of Opening Current Account Balances

For A

Closing Current Account Balance

40,000

Add: Drawings

36,000

Less: Profit Share

30,000

Opening Current Account Balance

46,000

 

For B

Closing Current Account Balance

(50,000)

Add: Drawings

36,000

Less: Profit Share

30,000

Opening Current Account Balance

(44,000)


Calculation of Interest on Current Account Balances

Interest allowed on A's Current Account Balance=46,000×5100=Rs 2,300 (Credit)Interest charged on B's Current Account Balance=44,000×5100=Rs 2,200 (Debit)

Answer:

In this question, date of drawings made by the partners is not given. Therefore, interest on drawings is calculated on average basis for a period of six months.

Interest on Ram's Drawings = 6,000 × 6100×612= Rs 180Interest on Mohan's Drawings = 4,000 × 6100×612= Rs 120 

 

Page No 2.80:

Question 14:

In this question, date of drawings made by the partners is not given. Therefore, interest on drawings is calculated on average basis for a period of six months.

Interest on Ram's Drawings = 6,000 × 6100×612= Rs 180Interest on Mohan's Drawings = 4,000 × 6100×612= Rs 120 

 

Answer:

Page No 2.80:

Question 15:

Answer:

Page No 2.80:

Question 16:

Answer:

Total Drawings = Rs 30,000 (2,500 × 12)

(i) If drawings are made in the beginning of each month
Interest on Drawings = Total Drawings × Rate100 × 6.512Interest on Drawings  = 30,000×6100×6.512=Rs 975

(ii) If drawings are made in the middle of each month
Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 30,000×6100×612=Rs 900

(iii) If drawings are made in the end of each month
Interest on Drawings = Total Drawings × Rate100 × 5.512Interest on Drawings = 30,000×6100×5.512=Rs 825

Page No 2.80:

Question 17:

Total Drawings = Rs 30,000 (2,500 × 12)

(i) If drawings are made in the beginning of each month
Interest on Drawings = Total Drawings × Rate100 × 6.512Interest on Drawings  = 30,000×6100×6.512=Rs 975

(ii) If drawings are made in the middle of each month
Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 30,000×6100×612=Rs 900

(iii) If drawings are made in the end of each month
Interest on Drawings = Total Drawings × Rate100 × 5.512Interest on Drawings = 30,000×6100×5.512=Rs 825

Answer:

(i) If drawings are made in the beginning of each quarter
Total Drawings = Rs 48,000 (12,000 × 4)
Interest on Drawings = Total Drawings × Rate100 × 7.512Interest on Drawings = 48,000×5100×7.512=Rs 1,500

(ii) If drawings are made at the end of each quarter
Total Drawings = Rs 48,000 (12,000 × 4)
Interest on Drawings = Total Drawings × Rate100 × 4.512Interest on Drawings = 48,000×5100×4.512=Rs 900

(iii) If drawings are made in the middle of each quarter
Total Drawings = Rs 72,000 (18,000 × 4)
Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 72,000×5100×612=Rs 1,800

Page No 2.80:

Question 18:

(i) If drawings are made in the beginning of each quarter
Total Drawings = Rs 48,000 (12,000 × 4)
Interest on Drawings = Total Drawings × Rate100 × 7.512Interest on Drawings = 48,000×5100×7.512=Rs 1,500

(ii) If drawings are made at the end of each quarter
Total Drawings = Rs 48,000 (12,000 × 4)
Interest on Drawings = Total Drawings × Rate100 × 4.512Interest on Drawings = 48,000×5100×4.512=Rs 900

(iii) If drawings are made in the middle of each quarter
Total Drawings = Rs 72,000 (18,000 × 4)
Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 72,000×5100×612=Rs 1,800

Answer:

Total Drawings = 10,000×6 = Rs 60,000                                                     XInterest on Drawings made in the beginning = Total Drawings × Rate100 × 3.512Interest on X's Drawings made in the beginning = 60,000×5100×3.512=Rs 875                                                     YInterest on Drawings made at the end = Total Drawings × Rate100 × 2.512Interest on Y's Drawings made at the end = 60,000×5100×2.512=Rs 625                                                    ZInterest on Drawings made in the middle = Total Drawings × Rate100 × 312Interest on Z's Drawings made in the middle = 60,000×5100×312=Rs 750

Page No 2.80:

Question 19:

Total Drawings = 10,000×6 = Rs 60,000                                                     XInterest on Drawings made in the beginning = Total Drawings × Rate100 × 3.512Interest on X's Drawings made in the beginning = 60,000×5100×3.512=Rs 875                                                     YInterest on Drawings made at the end = Total Drawings × Rate100 × 2.512Interest on Y's Drawings made at the end = 60,000×5100×2.512=Rs 625                                                    ZInterest on Drawings made in the middle = Total Drawings × Rate100 × 312Interest on Z's Drawings made in the middle = 60,000×5100×312=Rs 750

Answer:

Calculation of Interest on Capital

Calculation of Interest on Drawings

Interest on A’s Drawings

Year

2014-15

Drawings

×

Period

=

Product

June 30 to Mar. 31

500

×

9

=

4,500

July 31 to Mar. 31

600

×

8

=

4,800

Oct. 01 to Mar. 31

450

×

6

=

2,700

Mar. 01 to Mar. 31

1400

×

1

=

1,400

Sum of Product

13,400

 

 

Interest on B’s Drawings

Total Drawings = 300 ×12 = Rs 3,600

Average Period = 5.5 months



Page No 2.81:

Question 20:

Calculation of Interest on Capital

Calculation of Interest on Drawings

Interest on A’s Drawings

Year

2014-15

Drawings

×

Period

=

Product

June 30 to Mar. 31

500

×

9

=

4,500

July 31 to Mar. 31

600

×

8

=

4,800

Oct. 01 to Mar. 31

450

×

6

=

2,700

Mar. 01 to Mar. 31

1400

×

1

=

1,400

Sum of Product

13,400

 

 

Interest on B’s Drawings

Total Drawings = 300 ×12 = Rs 3,600

Average Period = 5.5 months

Answer:

Case I:
Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 60,000×5100×612=Rs 1,500

Case II:
Total Drawings = 5,000×12 = Rs 60,000Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 60,000×5100×612=Rs 1,500
Note: Since date of drawings is not given, thus, interest has been calculated for an average period of 6 months.

Page No 2.81:

Question 21:

Case I:
Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 60,000×5100×612=Rs 1,500

Case II:
Total Drawings = 5,000×12 = Rs 60,000Interest on Drawings = Total Drawings × Rate100 × 612Interest on Drawings = 60,000×5100×612=Rs 1,500
Note: Since date of drawings is not given, thus, interest has been calculated for an average period of 6 months.

Answer:

Interest on Drawings = Total Drawings × Rate100Interest on Drawings = 5,00,000 ×5100=Rs 25,000
Note:
Since p.a. word is not suffixed with the rate of interest on drawings, thus, time factor is not considered while calculating interest on drawings.

Page No 2.81:

Question 22:

Interest on Drawings = Total Drawings × Rate100Interest on Drawings = 5,00,000 ×5100=Rs 25,000
Note:
Since p.a. word is not suffixed with the rate of interest on drawings, thus, time factor is not considered while calculating interest on drawings.

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Salary:   Profit and Loss A/c (Net Profit) 8,40,000
X’s Capital A/c
2,40,000   (5,50,000 + 2,40,000 + 50,000 )  
Y’s Capital A/c
50,000 2,90,000    
Commission:      
X
55,000      
Y
45,000 1,00,000    
Profit transferred to:      
X’s Capital A/c
2,25,000      
Y’s Capital A/c
2,25,000 4,50,000    
  8,40,000   8,40,000
       

Working Notes:
WN 1: Calculation of Commission
For X: Net Profit after charging Salaries but before charging any commission
Net Profit after charging Salaries = Rs 5,50,000 (given in the question)Commission=5,50,000×10100=Rs 55,000

For Y: Net Profit after charging Salaries and commission
Net Profit after charging Salaries and Commission = 5,50,000 - 55,000 = Rs 4,95,000Commission=4,95,000×10110=Rs 45,000

WN 2: Calculation of Profit Share of each Partner
Net distributable profit = 8,40,000 – 2,90,000 – 1,00,000 = Rs 4,50,000
Profit share of both X and Y = 4,50,000×12=Rs 2,25,000

Page No 2.81:

Question 23:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Salary:   Profit and Loss A/c (Net Profit) 8,40,000
X’s Capital A/c
2,40,000   (5,50,000 + 2,40,000 + 50,000 )  
Y’s Capital A/c
50,000 2,90,000    
Commission:      
X
55,000      
Y
45,000 1,00,000    
Profit transferred to:      
X’s Capital A/c
2,25,000      
Y’s Capital A/c
2,25,000 4,50,000    
  8,40,000   8,40,000
       

Working Notes:
WN 1: Calculation of Commission
For X: Net Profit after charging Salaries but before charging any commission
Net Profit after charging Salaries = Rs 5,50,000 (given in the question)Commission=5,50,000×10100=Rs 55,000

For Y: Net Profit after charging Salaries and commission
Net Profit after charging Salaries and Commission = 5,50,000 - 55,000 = Rs 4,95,000Commission=4,95,000×10110=Rs 45,000

WN 2: Calculation of Profit Share of each Partner
Net distributable profit = 8,40,000 – 2,90,000 – 1,00,000 = Rs 4,50,000
Profit share of both X and Y = 4,50,000×12=Rs 2,25,000

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @5%:   Profit and Loss A/c (Net Profit) 1,04,000
X’s Capital A/c
6,000      
Y’s Capital A/c
10,000 16,000    
Salary to Z 25,000    
Commission to Z @ 5%  3,000    
Charity at 20% 12,000    
Profit transferred to:      
X’s Capital A/c
24,000      
Y’s Capital A/c
24,000 48,000    
  1,04,000   1,04,000
       

Working Notes:
WN 1: Calculation of Commission
Profit after Interest on Capital and Salary= 1,04,000 - 16,000 - 25,000 = Rs 63,000
Commission = 63,000×5105=Rs 3,000

WN 2: Calculation of Charity
Profit after Interest on Capital, Salary and Commission = 1,04,000 - 16,000 - 25,000 - 3,000 = Rs 60,000
Donation to Charity=60,000×20100=Rs 12,000

WN 3: Distribution of profit among X and Y
Profit to be distributed = 1,04,000 - 16,000 - 25,000 - 3,000 - 12,000 = Rs 48,000
Share of X and Y individually = Rs 24,000 (each)

Page No 2.81:

Question 24:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @5%:   Profit and Loss A/c (Net Profit) 1,04,000
X’s Capital A/c
6,000      
Y’s Capital A/c
10,000 16,000    
Salary to Z 25,000    
Commission to Z @ 5%  3,000    
Charity at 20% 12,000    
Profit transferred to:      
X’s Capital A/c
24,000      
Y’s Capital A/c
24,000 48,000    
  1,04,000   1,04,000
       

Working Notes:
WN 1: Calculation of Commission
Profit after Interest on Capital and Salary= 1,04,000 - 16,000 - 25,000 = Rs 63,000
Commission = 63,000×5105=Rs 3,000

WN 2: Calculation of Charity
Profit after Interest on Capital, Salary and Commission = 1,04,000 - 16,000 - 25,000 - 3,000 = Rs 60,000
Donation to Charity=60,000×20100=Rs 12,000

WN 3: Distribution of profit among X and Y
Profit to be distributed = 1,04,000 - 16,000 - 25,000 - 3,000 - 12,000 = Rs 48,000
Share of X and Y individually = Rs 24,000 (each)

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs. Particulars Amount Rs.
Interest on Capital   Profit and Loss A/c (Net Profit) 1,50,000
A’s Capital A/c
15,000   Interest on Drawings (WN 1)  
B’s Capital A/c
12,000  
A’s Capital A/c
1,950  
C’s Capital A/c
9,000 36,000
B’s Capital A/c
1,800  
Salary  
C’s Capital A/c
1,650 5,400
B (1,500 × 12)
18,000      
C (1,500 × 12)
18,000 36,000    
Commission to A 1,50,000×5100 7,500    
Transfer to Reserve (WN 2) 7,590    
Profit transferred to:      
A’s Capital A/c
30,360      
B’s Capital A/c
C’s Capital A/c
22,770 15,180 68,310    
  1,54,500   1,54,500
       

Working Notes:
WN 1: Calculation of Interest on Drawings
Total Drawings = 3,000×12 = Rs 36,000
Interest on Drawings (A) = Total Drawings × Rate100 × 6.512Interest on Drawings (A)= 36,000×10100×6.512=Rs 1,950Interest on Drawings (B) = Total Drawings × Rate100 × 612Interest on Drawings (B)= 36,000×10100×612=Rs 1,800Interest on Drawings (C) = Total Drawings × Rate100 × 5.512Interest on Drawings (C)= 36,000×10100×5.512=Rs 1,650

WN 2: Calculation of Transfer to Reserve
Amount to be transferred to Reserve = Distributable Profit × 10100Amount to be transferred to Reserve =75,900* × 10100=Rs 7,590*Distributable Profit = 1,50,000 + 5,400 36,000  36,000  7,500 = Rs 75,900

Page No 2.81:

Question 25:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs. Particulars Amount Rs.
Interest on Capital   Profit and Loss A/c (Net Profit) 1,50,000
A’s Capital A/c
15,000   Interest on Drawings (WN 1)  
B’s Capital A/c
12,000  
A’s Capital A/c
1,950  
C’s Capital A/c
9,000 36,000
B’s Capital A/c
1,800  
Salary  
C’s Capital A/c
1,650 5,400
B (1,500 × 12)
18,000      
C (1,500 × 12)
18,000 36,000    
Commission to A 1,50,000×5100 7,500    
Transfer to Reserve (WN 2) 7,590    
Profit transferred to:      
A’s Capital A/c
30,360      
B’s Capital A/c
C’s Capital A/c
22,770 15,180 68,310    
  1,54,500   1,54,500
       

Working Notes:
WN 1: Calculation of Interest on Drawings
Total Drawings = 3,000×12 = Rs 36,000
Interest on Drawings (A) = Total Drawings × Rate100 × 6.512Interest on Drawings (A)= 36,000×10100×6.512=Rs 1,950Interest on Drawings (B) = Total Drawings × Rate100 × 612Interest on Drawings (B)= 36,000×10100×612=Rs 1,800Interest on Drawings (C) = Total Drawings × Rate100 × 5.512Interest on Drawings (C)= 36,000×10100×5.512=Rs 1,650

WN 2: Calculation of Transfer to Reserve
Amount to be transferred to Reserve = Distributable Profit × 10100Amount to be transferred to Reserve =75,900* × 10100=Rs 7,590*Distributable Profit = 1,50,000 + 5,400 36,000  36,000  7,500 = Rs 75,900

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Partners’ Commission:

 

Profit and Loss A/c (Net Profit)

1,80,000

A

6,000

 

 

 

B

9,000

 

 

 

C

6,000

 

 

 

D

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 1 Calculation of Partners’ Commission

Partners’ Commission = 20% on Net Profit after such commission

This commission is to be shared by the partners in the ratio of 2 : 3 : 2 : 3

WN 2 Calculation of Profit Share of each Partner

Profit available for Distribution = 1,80,000 − 30,000 = Rs 1,50,000

Profit sharing ratio = 4 : 3 : 2 : 1



Page No 2.82:

Question 26:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Partners’ Commission:

 

Profit and Loss A/c (Net Profit)

1,80,000

A

6,000

 

 

 

B

9,000

 

 

 

C

6,000

 

 

 

D

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 1 Calculation of Partners’ Commission

Partners’ Commission = 20% on Net Profit after such commission

This commission is to be shared by the partners in the ratio of 2 : 3 : 2 : 3

WN 2 Calculation of Profit Share of each Partner

Profit available for Distribution = 1,80,000 − 30,000 = Rs 1,50,000

Profit sharing ratio = 4 : 3 : 2 : 1

Answer:

Amount advanced by the Partners = Rs 30,000

Profit sharing ratio = 3 : 2

Time Period (from October 01, 2015 to March 31, 2016) = 6 months

Interest rate = 6% p.a.

Calculation of Interest on Advances

Note: In the absence of a partnership agreement regarding rate of interest on loans and advances, interest is provided at 6% p.a.

Page No 2.82:

Question 27:

Amount advanced by the Partners = Rs 30,000

Profit sharing ratio = 3 : 2

Time Period (from October 01, 2015 to March 31, 2016) = 6 months

Interest rate = 6% p.a.

Calculation of Interest on Advances

Note: In the absence of a partnership agreement regarding rate of interest on loans and advances, interest is provided at 6% p.a.

Answer:

Journal
Date Particulars L.F. Debit
Amount

(Rs)
Credit
Amount

(Rs)
2015 Bank A/c Dr.   5,00,000  
Oct. 01
To X’s Loan A/c
      2,00,000
 
To Z’s Loan A/c
      3,00,000
  (Loan received from X and Z)        
2016          
Mar. 31 Interest on X’s Loan A/c Dr.   6,000  
  Interest on Z’s Loan A/c Dr.   9,000  
 
To X’s Loan A/c
      6,000
 
To Z’s Loan A/c
      9,000
  (Interest on loan credited to Partner’s Loan A/c)        
           
Mar. 31 Profit and Loss A/c Dr.   15,000  
 
To Interest on X’s Loan A/c
      6,000
 
To Interest on Z’s Loan A/c
      9,000
  (Interest on Loan transferred to Profit and Loss A/c)        
           

 

X’s Loan Account
Dr.   Cr.
Date Particulars Amount Rs Date Particulars  Amount Rs
2016     2015    
Mar.31 Balance c/d 2,06,000 Oct. 01 Bank A/c 2,00,000
      2016    
      Mar. 31 Interest on X’s Loan A/c 6,000
    2,06,000     2,06,000
           

 

Z’s Loan Account
Dr.   Cr.
Date Particulars Amount
Rs
Date Particulars  Amount
Rs
2016     2015    
Mar.31 Balance c/d 3,09,000 Oct. 01 Bank A/c 3,00,000
      2016    
      Mar. 31 Interest on Z’s Loan A/c 9,000
    3,09,000     3,09,000
           

Working Notes: Calculation of Interest on Loan
X = 2,00,000 × 6100 × 612 = Rs 6,000Z = 3,00,000 × 6100 × 612 =Rs 9,000

Page No 2.82:

Question 28:

Journal
Date Particulars L.F. Debit
Amount

(Rs)
Credit
Amount

(Rs)
2015 Bank A/c Dr.   5,00,000  
Oct. 01
To X’s Loan A/c
      2,00,000
 
To Z’s Loan A/c
      3,00,000
  (Loan received from X and Z)        
2016          
Mar. 31 Interest on X’s Loan A/c Dr.   6,000  
  Interest on Z’s Loan A/c Dr.   9,000  
 
To X’s Loan A/c
      6,000
 
To Z’s Loan A/c
      9,000
  (Interest on loan credited to Partner’s Loan A/c)        
           
Mar. 31 Profit and Loss A/c Dr.   15,000  
 
To Interest on X’s Loan A/c
      6,000
 
To Interest on Z’s Loan A/c
      9,000
  (Interest on Loan transferred to Profit and Loss A/c)        
           

 

X’s Loan Account
Dr.   Cr.
Date Particulars Amount Rs Date Particulars  Amount Rs
2016     2015    
Mar.31 Balance c/d 2,06,000 Oct. 01 Bank A/c 2,00,000
      2016    
      Mar. 31 Interest on X’s Loan A/c 6,000
    2,06,000     2,06,000
           

 

Z’s Loan Account
Dr.   Cr.
Date Particulars Amount
Rs
Date Particulars  Amount
Rs
2016     2015    
Mar.31 Balance c/d 3,09,000 Oct. 01 Bank A/c 3,00,000
      2016    
      Mar. 31 Interest on Z’s Loan A/c 9,000
    3,09,000     3,09,000
           

Working Notes: Calculation of Interest on Loan
X = 2,00,000 × 6100 × 612 = Rs 6,000Z = 3,00,000 × 6100 × 612 =Rs 9,000

Answer:

Case 1: If the profits before interest for the year amounted to Rs 3,750
 

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Profit transferred to:   Profit and Loss A/c 1,050
X’s Capital A/c
420   (3,750 – 2,700)  
Y’s Capital A/c
630 1,050    
  1,050   1,050
       


Case 2: If the profits before interest for the year amounted to Rs 2,250

 

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
       
Profit and Loss A/c 450 Loss transferred to:  
(2,700 – 2,250)  
X’s Capital A/c
180  
   
Y’s Capital A/c
270 450
  450   450
       

Case 3: If the losses before interest for the year amounted to Rs 3,750

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Profit and Loss A/c 6,450 Loss transferred to:  
(3,750 + 2,700)  
X’s Capital A/c
2,580  
   
Y’s Capital A/c
3,870 6,450
  6,450   6,450
       

Working Notes: Calculation of Interest on Loan
X = 60,000 × 6100 × 612 = Rs 1,800Y = 30,000 × 6100 × 612 =Rs 900
Rate of interest on loan has not been provided in the question, thus, as per Indian Partnership Act, 1932 interest has been calculated @ 6% p.a.

Page No 2.82:

Question 29:

Case 1: If the profits before interest for the year amounted to Rs 3,750
 

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Profit transferred to:   Profit and Loss A/c 1,050
X’s Capital A/c
420   (3,750 – 2,700)  
Y’s Capital A/c
630 1,050    
  1,050   1,050
       


Case 2: If the profits before interest for the year amounted to Rs 2,250

 

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
       
Profit and Loss A/c 450 Loss transferred to:  
(2,700 – 2,250)  
X’s Capital A/c
180  
   
Y’s Capital A/c
270 450
  450   450
       

Case 3: If the losses before interest for the year amounted to Rs 3,750

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Profit and Loss A/c 6,450 Loss transferred to:  
(3,750 + 2,700)  
X’s Capital A/c
2,580  
   
Y’s Capital A/c
3,870 6,450
  6,450   6,450
       

Working Notes: Calculation of Interest on Loan
X = 60,000 × 6100 × 612 = Rs 1,800Y = 30,000 × 6100 × 612 =Rs 900
Rate of interest on loan has not been provided in the question, thus, as per Indian Partnership Act, 1932 interest has been calculated @ 6% p.a.

Answer:

Journal
Particulars L.F. Debit Amount Rs Credit Amount
Rs
Profit and Loss A/c Dr.   3,00,000  
To Rent A/c
    3,00,000
(Rent paid debited to Profit and Loss A/c)      
       
Rent A/c Dr.   3,00,000  
To A’s Capital/Current A/c
    3,00,000
(Rent credited to A’s Capital/Current A/c)      
       
Profit and Loss A/c Dr.   3,13,437  
To Profit and Loss Appropriation A/c
    3,13,437
(Profit transferred to Appropriation Account)      
         
Profit and Loss Appropriation A/c Dr.   62,687  
To General Reserve (WN1)
    62,687
(General Reserve created out of Profit)      
         
A’s Salary A/c Dr.   60,000  
B’s Salary A/c Dr.   90,000  
To A’s Capital/Current A/c
    60,000
To B’s Capital/Current A/c
    90,000
(Salary credited to Partner’s Capital/Current A/c)      
         
Profit and Loss Appropriation A/c Dr.   1,67,500  
To A’s Salary A/c
    60,000
To B’s Salary A/c
    90,000
To B’s Commission A/c
    17,500
(Salary and Commission debited to Profit and Loss Appropriation A/c)      
         
B’s Commission A/c Dr.   17,500  
To B’s Capital/Current A/c
    17,500
(Commission to B credited to his capital/current A/c)      
         
Interest on A’s Capital A/c Dr.   24,000  
Interest on B’s Capital A/c Dr.   18,000  
To A’s Capital/Current A/c
    24,000
To B’s Capital/Current A/c
    18,000
(Interest on Capital credited to Partner’s Capital/Current A/c)      
       
Profit and Loss Appropriation A/c Dr.   42,000  
To Interest on A’s Capital A/c
    24,000
To Interest on B’s Capital A/c
    18,000
(Interest on Capital debited to Profit and Loss Appropriation A/c)      
       
A’s Capital/Current A/c (WN2) Dr.   5,000  
B’s Capital/Current A/c Dr.   6,250  
To A’s Interest on Drawings A/c
    5,000
To B’s Interest on Drawings A/c
    6,250
(Interest on Drawings debited to Partner’s Capital/Current A/c)      
       
Interest on A’s Drawings A/c Dr.   5,000  
Interest on B’s Drawings A/c Dr.   6,250  
To Profit and Loss Appropriation A/c
    11,250
(Interest on Drawings credited to Profit and Loss Appropriation A/c)      
       
Profit and Loss Appropriation A/c Dr.   52,500  
To A’s Capital/Current A/c (WN3)
    30,000
To B’s Capital/Current A/c
    22,500
(Profit distributed between partners in their ratio)      

 

Profit and Loss Appropriation Account
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 12%   Profit and Loss A/c 3,13,437
A
24,000   (6,13,437 - 3,00,000 )  
B
18,000 42,000 Interest on Drawings @ 10 %  
   
A
5,000  
Transfer to General Reserve 62,687
B
6,250 11,250
Salary:      
A
60,000      
B
90,000 1,50,000    
Commission to B 17,500    
Profit transferred to:      
A’s Capital A/c
30,000      
B’s Capital A/c
22,500 52,500    
  3,24,687   3,24,687
       

(a) Fluctuating Capital Accounts
Partners’ Capital Accounts
Dr.   Cr.
Date Particulars A B Date Particulars A B
2016       2015      
March 31 Drawings A/c 1,00,000 1,25,000 April 01 Balance b/d 2,00,000 1,50,000
March 31 Interest on Drawings A/c 5,000 6,250 2016      
March 31 Balance c/d 5,09,000 1,66,750 March 31 Interest on Capital A/c 24,000 18,000
        March 31 Rent 3,00,000  
        March 31 Salary 60,000 90,000
        March 31 Commission   17,500
        March 31 P&L Appropriation A/c 30,000 22,500
    6,14,000 2,98,000     6,14,000 2,98,000
               


(b) Fixed

 
Partners’ Capital Accounts
Dr.   Cr.
Date Particulars A B Date Particulars A B
2016       2015      
March 31       April 01 Balance b/d 2,00,000 1,50,000
  Balance c/d 2,00,000 1,50,000        
    2,00,000 1,50,000     2,00,000 1,50,000
               

 

Partners’ Current Accounts
Dr.     Cr.
Date Particulars A B Date Particulars A B
2016       2016      
March 31 Drawings A/c 1,00,000 1,25,000 March 31 Rent 3,00,000  
March 31 Interest on Drawings A/c 5,000 6,250 March 31 Interest on Capital A/c 24,000 18,000
March 31 Balance c/d 3,09,000 16,750 March 31 Salary 60,000 90,000
        March 31 Commission   17,500
        March 31 P&L Appropriation. A/c 30,000 22,500
    4,14,000 1,48,000     4,14,000 1,48,000
               

Working Notes:
WN 1: Calculation of Transfer to Reserve
Reserve = 3,13,437 ×20100=Rs 62,687

WN 2: Calculation of Interest on Drawings
When the date of withdrawal is not given interest on drawings is calculated for 6 months:
A = 1,00,000 × 10100 ×612 =  Rs 5,000B = 1,25,000 × 10100 ×612 = Rs 6,250

WN 3: Calculation of Distribution of Profits
Net Distributable Profits = 3,13,437 + 11,250 – 42,000 – 62,687 – 1,50,000 – 17,500 = Rs 52,500
Ratio between A and B is 4 : 3
A = 52,500 × 47 = Rs 30,000B = 52,500 × 37 = Rs 22,500

Page No 2.82:

Question 30:

Journal
Particulars L.F. Debit Amount Rs Credit Amount
Rs
Profit and Loss A/c Dr.   3,00,000  
To Rent A/c
    3,00,000
(Rent paid debited to Profit and Loss A/c)      
       
Rent A/c Dr.   3,00,000  
To A’s Capital/Current A/c
    3,00,000
(Rent credited to A’s Capital/Current A/c)      
       
Profit and Loss A/c Dr.   3,13,437  
To Profit and Loss Appropriation A/c
    3,13,437
(Profit transferred to Appropriation Account)      
         
Profit and Loss Appropriation A/c Dr.   62,687  
To General Reserve (WN1)
    62,687
(General Reserve created out of Profit)      
         
A’s Salary A/c Dr.   60,000  
B’s Salary A/c Dr.   90,000  
To A’s Capital/Current A/c
    60,000
To B’s Capital/Current A/c
    90,000
(Salary credited to Partner’s Capital/Current A/c)      
         
Profit and Loss Appropriation A/c Dr.   1,67,500  
To A’s Salary A/c
    60,000
To B’s Salary A/c
    90,000
To B’s Commission A/c
    17,500
(Salary and Commission debited to Profit and Loss Appropriation A/c)      
         
B’s Commission A/c Dr.   17,500  
To B’s Capital/Current A/c
    17,500
(Commission to B credited to his capital/current A/c)      
         
Interest on A’s Capital A/c Dr.   24,000  
Interest on B’s Capital A/c Dr.   18,000  
To A’s Capital/Current A/c
    24,000
To B’s Capital/Current A/c
    18,000
(Interest on Capital credited to Partner’s Capital/Current A/c)      
       
Profit and Loss Appropriation A/c Dr.   42,000  
To Interest on A’s Capital A/c
    24,000
To Interest on B’s Capital A/c
    18,000
(Interest on Capital debited to Profit and Loss Appropriation A/c)      
       
A’s Capital/Current A/c (WN2) Dr.   5,000  
B’s Capital/Current A/c Dr.   6,250  
To A’s Interest on Drawings A/c
    5,000
To B’s Interest on Drawings A/c
    6,250
(Interest on Drawings debited to Partner’s Capital/Current A/c)      
       
Interest on A’s Drawings A/c Dr.   5,000  
Interest on B’s Drawings A/c Dr.   6,250  
To Profit and Loss Appropriation A/c
    11,250
(Interest on Drawings credited to Profit and Loss Appropriation A/c)      
       
Profit and Loss Appropriation A/c Dr.   52,500  
To A’s Capital/Current A/c (WN3)
    30,000
To B’s Capital/Current A/c
    22,500
(Profit distributed between partners in their ratio)      

 

Profit and Loss Appropriation Account
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 12%   Profit and Loss A/c 3,13,437
A
24,000   (6,13,437 - 3,00,000 )  
B
18,000 42,000 Interest on Drawings @ 10 %  
   
A
5,000  
Transfer to General Reserve 62,687
B
6,250 11,250
Salary:      
A
60,000      
B
90,000 1,50,000    
Commission to B 17,500    
Profit transferred to:      
A’s Capital A/c
30,000      
B’s Capital A/c
22,500 52,500    
  3,24,687   3,24,687
       

(a) Fluctuating Capital Accounts
Partners’ Capital Accounts
Dr.   Cr.
Date Particulars A B Date Particulars A B
2016       2015      
March 31 Drawings A/c 1,00,000 1,25,000 April 01 Balance b/d 2,00,000 1,50,000
March 31 Interest on Drawings A/c 5,000 6,250 2016      
March 31 Balance c/d 5,09,000 1,66,750 March 31 Interest on Capital A/c 24,000 18,000
        March 31 Rent 3,00,000  
        March 31 Salary 60,000 90,000
        March 31 Commission   17,500
        March 31 P&L Appropriation A/c 30,000 22,500
    6,14,000 2,98,000     6,14,000 2,98,000
               


(b) Fixed

 
Partners’ Capital Accounts
Dr.   Cr.
Date Particulars A B Date Particulars A B
2016       2015      
March 31       April 01 Balance b/d 2,00,000 1,50,000
  Balance c/d 2,00,000 1,50,000        
    2,00,000 1,50,000     2,00,000 1,50,000
               

 

Partners’ Current Accounts
Dr.     Cr.
Date Particulars A B Date Particulars A B
2016       2016      
March 31 Drawings A/c 1,00,000 1,25,000 March 31 Rent 3,00,000  
March 31 Interest on Drawings A/c 5,000 6,250 March 31 Interest on Capital A/c 24,000 18,000
March 31 Balance c/d 3,09,000 16,750 March 31 Salary 60,000 90,000
        March 31 Commission   17,500
        March 31 P&L Appropriation. A/c 30,000 22,500
    4,14,000 1,48,000     4,14,000 1,48,000
               

Working Notes:
WN 1: Calculation of Transfer to Reserve
Reserve = 3,13,437 ×20100=Rs 62,687

WN 2: Calculation of Interest on Drawings
When the date of withdrawal is not given interest on drawings is calculated for 6 months:
A = 1,00,000 × 10100 ×612 =  Rs 5,000B = 1,25,000 × 10100 ×612 = Rs 6,250

WN 3: Calculation of Distribution of Profits
Net Distributable Profits = 3,13,437 + 11,250 – 42,000 – 62,687 – 1,50,000 – 17,500 = Rs 52,500
Ratio between A and B is 4 : 3
A = 52,500 × 47 = Rs 30,000B = 52,500 × 37 = Rs 22,500

Answer:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital:

 

Profit and Loss A/c (Net Profit after Z’s salary)

4,00,000

X

50,000

 

 

 

Y

50,000

 

 

 

Z

25,000

1,25000

 

 

Profit transferred to:

 

 

 

X’s Capital A/c

1,10,000

 

 

 

Y’s Capital A/c

1,10,000

 

 

 

Z’s Capital A/c

55,000

2,75,000

 

 

 

4,00,000

 

4,00,000

 

 

 

 

Working Notes:

WN 1 Salary to Z has not been debited to Profit and Loss Appropriation Account. This is because Profit of Rs 4,00,000 is given after adjusting the Z’s salary.

WN 2 Calculation of Interest on Capital

WN 3 Calculation of Profit Share of each Partner

Divisible of Profit after Interest on Capital = Rs 4,00,000 − Rs 1,25,000 = Rs 2,75,000

Profit sharing ratio = 2 : 2 : 1

Page No 2.82:

Question 31:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital:

 

Profit and Loss A/c (Net Profit after Z’s salary)

4,00,000

X

50,000

 

 

 

Y

50,000

 

 

 

Z

25,000

1,25000

 

 

Profit transferred to:

 

 

 

X’s Capital A/c

1,10,000

 

 

 

Y’s Capital A/c

1,10,000

 

 

 

Z’s Capital A/c

55,000

2,75,000

 

 

 

4,00,000

 

4,00,000

 

 

 

 

Working Notes:

WN 1 Salary to Z has not been debited to Profit and Loss Appropriation Account. This is because Profit of Rs 4,00,000 is given after adjusting the Z’s salary.

WN 2 Calculation of Interest on Capital

WN 3 Calculation of Profit Share of each Partner

Divisible of Profit after Interest on Capital = Rs 4,00,000 − Rs 1,25,000 = Rs 2,75,000

Profit sharing ratio = 2 : 2 : 1

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2015
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital (WN3)   Profit and Loss A/c 5,97,600
X
22,000   (6,00,000 - 2,400)  
Y
17,500   Interest on Drawings (WN2)  
Z
9,000 48,500
X
6,600  
Salary to:  
Y
4,400  
Y
40,000  
Z
4,400 15,400
Z
60,000 1,00,000    
Profit transferred to:      
X’s Capital A/c
1,85,800      
Y’s Capital A/c
1,85,800      
Z’s Capital A/c
92,900 4,64,500    
  6,13,000   6,13,000
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2014         2014        
Oct. 01 Bank A/c     20,000 Apr. 01 Balance b/d 2,00,000 1,60,000 1,00,000
2015         Oct. 01 Bank A/c 40,000 30,000  
Mar. 31 Balance c/d 2,40,000 1,90,000 80,000          
    2,40,000 1,90,000 1,00,000     2,40,000 1,90,000 1,00,000
                   

 

Partners’ Current Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2014         2014        
Apr. 01 Balance b/d   8,000   Apr. 01 Balance b/d 20,000   10,000
2015         2015        
Mar. 31 Drawings A/c 1,44,000 96,000 96,000 Mar. 31 Interest on Capital A/c 22,000 17,500 9,000
Mar. 31 Interest on Drawings A/c 6,600 4,400 4,400 Mar. 31 Salary A/c   40,000 60,000
Mar. 31 Balance c/d 77,200 1,34,900 71,500 Mar. 31 P&L Appropriation A/c 1,85,800 1,85,800 92,900
    2,27,300 2,43,300 1,71,900     2,27,800 2,43,300 1,71,900
                   

Working Notes:
WN 1: Calculation of Interest on Loan
Y= 40,000 × 6100= Rs 2,400
Interest on Loan is a charge against profit therefore net profit after deducting interest on loan amount is shown in Profit and Loss Appropriation Account. Also, Interest on Loan is to be shown in Partners’ Loan Account and hence it is not credited to Partners’ Current Account.

WN 2: Calculation of Interest on Drawings (at the end of each month)
X=1,44,000×10100×5.512=Rs 6,600Y=96,000×10100×5.512=Rs 4,400Z=96,000×10100×5.512=Rs 4,400

WN 3: Calculation of Interest on Capital

Interest (1st April – 1st Oct.) Interest (1st Oct. – 31st March) Total
X=2,00,000×10100×612=Rs 10,000 X=2,40,000×10100×612=Rs12,000 22,000
Y=1,60,000×10100×612=Rs 8,000 Y=1,90,000×10100×612=Rs 9,500 17,500
Z=1,00,000×10100×612=Rs 5,000 Z=80,000×10100×612=Rs 4,000 9,000



Page No 2.83:

Question 32:

Profit and Loss Appropriation Account
for the year ended 31st March, 2015
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital (WN3)   Profit and Loss A/c 5,97,600
X
22,000   (6,00,000 - 2,400)  
Y
17,500   Interest on Drawings (WN2)  
Z
9,000 48,500
X
6,600  
Salary to:  
Y
4,400  
Y
40,000  
Z
4,400 15,400
Z
60,000 1,00,000    
Profit transferred to:      
X’s Capital A/c
1,85,800      
Y’s Capital A/c
1,85,800      
Z’s Capital A/c
92,900 4,64,500    
  6,13,000   6,13,000
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2014         2014        
Oct. 01 Bank A/c     20,000 Apr. 01 Balance b/d 2,00,000 1,60,000 1,00,000
2015         Oct. 01 Bank A/c 40,000 30,000  
Mar. 31 Balance c/d 2,40,000 1,90,000 80,000          
    2,40,000 1,90,000 1,00,000     2,40,000 1,90,000 1,00,000
                   

 

Partners’ Current Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2014         2014        
Apr. 01 Balance b/d   8,000   Apr. 01 Balance b/d 20,000   10,000
2015         2015        
Mar. 31 Drawings A/c 1,44,000 96,000 96,000 Mar. 31 Interest on Capital A/c 22,000 17,500 9,000
Mar. 31 Interest on Drawings A/c 6,600 4,400 4,400 Mar. 31 Salary A/c   40,000 60,000
Mar. 31 Balance c/d 77,200 1,34,900 71,500 Mar. 31 P&L Appropriation A/c 1,85,800 1,85,800 92,900
    2,27,300 2,43,300 1,71,900     2,27,800 2,43,300 1,71,900
                   

Working Notes:
WN 1: Calculation of Interest on Loan
Y= 40,000 × 6100= Rs 2,400
Interest on Loan is a charge against profit therefore net profit after deducting interest on loan amount is shown in Profit and Loss Appropriation Account. Also, Interest on Loan is to be shown in Partners’ Loan Account and hence it is not credited to Partners’ Current Account.

WN 2: Calculation of Interest on Drawings (at the end of each month)
X=1,44,000×10100×5.512=Rs 6,600Y=96,000×10100×5.512=Rs 4,400Z=96,000×10100×5.512=Rs 4,400

WN 3: Calculation of Interest on Capital

Interest (1st April – 1st Oct.) Interest (1st Oct. – 31st March) Total
X=2,00,000×10100×612=Rs 10,000 X=2,40,000×10100×612=Rs12,000 22,000
Y=1,60,000×10100×612=Rs 8,000 Y=1,90,000×10100×612=Rs 9,500 17,500
Z=1,00,000×10100×612=Rs 5,000 Z=80,000×10100×612=Rs 4,000 9,000

Answer:

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Sohan Rs

Mohan Rs

Particulars

Sohan Rs

Mohan Rs

Drawings A/c

50,000

30,000

Balance b/d

4,00,000

3,00,000

Interest on Drawings A/c

1,250

750

Interest on Capital A/c

20,000

15,000

 

 

 

P/L Appropriation A/c

60,000

50,000

Balance c/d

4,69,750

3,37,250

Partners’ Salary

36,000

-

 

 

 

Commission

5,000

3,000

 

5,21,000

3,68,000

 

5,21,000

3,68,000

 

 

 

 

 

 

Working Note:

Calculation of Interest on Capital

Page No 2.83:

Question 33:

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Sohan Rs

Mohan Rs

Particulars

Sohan Rs

Mohan Rs

Drawings A/c

50,000

30,000

Balance b/d

4,00,000

3,00,000

Interest on Drawings A/c

1,250

750

Interest on Capital A/c

20,000

15,000

 

 

 

P/L Appropriation A/c

60,000

50,000

Balance c/d

4,69,750

3,37,250

Partners’ Salary

36,000

-

 

 

 

Commission

5,000

3,000

 

5,21,000

3,68,000

 

5,21,000

3,68,000

 

 

 

 

 

 

Working Note:

Calculation of Interest on Capital

Answer:

Profit and Loss Adjustment Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Kajal’s loan@ 6% p.a.

1,800

Profit

70,260

Profit transferred to P/L Appropriation A/c

68,460

 

 

 

 

 

 

 

70,260

 

70,260

 

 

 

 

 

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

68,460

Sajal

2,500

 

 

 

Kajal

2,000

4,500

Interest on Drawings A/c:

 

 

 

Sajal

300

 

Reserve

6,450

Kajal

240

540

Profit transferred to:

 

 

 

 Sajal’s Capital A/c

  38,700

 

 

 

Kajal’s Capital A/c

19,350

58,050

 

 

 

69,000

 

69,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Sajal

Kajal

Particulars

Sajal

Kajal

Drawings A/c

10,000

8,000

Balance b/d

50,000

40,000

Interest on Drawings A/c

300

240

Interest on Capital A/c

2,500

2,000

 

 

 

P/L Appropriation A/c

38,700

19,350

Balance c/d

80,900

53,110

 

 

 

 

91,200

61,350

 

91,200

61,350

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Interest on Drawings

WN 3 Calculation of Amount to be transferred to Reserve

Amount for Reserve = 10% of Divisible Profit

Divisible Profit = Profit + Interest on Drawings Interest on Capital

= 68,460 + 540 4,500 = Rs 64,500

WN 4 Calculation of Profit Share of each Partner

Profit available for Distribution = 68,460 + 540 − 4,500 − 6,450 = Rs 58,050

Profit sharing ratio = 2 : 1

Page No 2.83:

Question 34:

Profit and Loss Adjustment Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Kajal’s loan@ 6% p.a.

1,800

Profit

70,260

Profit transferred to P/L Appropriation A/c

68,460

 

 

 

 

 

 

 

70,260

 

70,260

 

 

 

 

 

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

68,460

Sajal

2,500

 

 

 

Kajal

2,000

4,500

Interest on Drawings A/c:

 

 

 

Sajal

300

 

Reserve

6,450

Kajal

240

540

Profit transferred to:

 

 

 

 Sajal’s Capital A/c

  38,700

 

 

 

Kajal’s Capital A/c

19,350

58,050

 

 

 

69,000

 

69,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Sajal

Kajal

Particulars

Sajal

Kajal

Drawings A/c

10,000

8,000

Balance b/d

50,000

40,000

Interest on Drawings A/c

300

240

Interest on Capital A/c

2,500

2,000

 

 

 

P/L Appropriation A/c

38,700

19,350

Balance c/d

80,900

53,110

 

 

 

 

91,200

61,350

 

91,200

61,350

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Interest on Drawings

WN 3 Calculation of Amount to be transferred to Reserve

Amount for Reserve = 10% of Divisible Profit

Divisible Profit = Profit + Interest on Drawings Interest on Capital

= 68,460 + 540 4,500 = Rs 64,500

WN 4 Calculation of Profit Share of each Partner

Profit available for Distribution = 68,460 + 540 − 4,500 − 6,450 = Rs 58,050

Profit sharing ratio = 2 : 1

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c (Net Profit)

55,000

Kalu

2,500

 

 

 

Lalu

1,500

4,000

Interest on Drawings A/c:

 

Partners’ Salaries

 

Kalu

87.50

 

Kalu (Rs 500 × 12)

6,000

 

Lalu

60.00

147.50

Lalu (Rs 400 × 12)

4,800

10,800

 

 

 

Profit transferred to:

 

 

 

Kalu’s Capital A/c

24,208.50

 

 

 

Lalu’s Capital A/c

16,139.00

40,347.50

 

 

 

55,147.50

 

55,147.50

 

 

 

 

 

Partners’ Capital Accounts

Cr.

 

 

 

 

Dr.

Particulars

Kalu

Rs

Lalu
Rs

Particulars

Kalu

Rs

Lalu
Rs

Drawings A/c

3,500

2,400

Balance b/d

50,000

30,000

Interest on Drawings A/c

87.50

60

Interest on Capital A/c

2,500

1,500

 

 

 

Partners’ Salary A/c

6,000

4,800

Balance c/d

79,121

49,979

P/L Appropriation A/c

24,208.50

16,139

 

82,708.50

52,439

 

82,708.50

52,439

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Interest on Drawings

WN 3 Calculation of Profit Share of each Partner

Profit available for Distribution = 55,000 + 147.50 − 4,000 − 10,800 = Rs 40,347.50

Profit sharing ratio = 3 : 2

Page No 2.83:

Question 35:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c (Net Profit)

55,000

Kalu

2,500

 

 

 

Lalu

1,500

4,000

Interest on Drawings A/c:

 

Partners’ Salaries

 

Kalu

87.50

 

Kalu (Rs 500 × 12)

6,000

 

Lalu

60.00

147.50

Lalu (Rs 400 × 12)

4,800

10,800

 

 

 

Profit transferred to:

 

 

 

Kalu’s Capital A/c

24,208.50

 

 

 

Lalu’s Capital A/c

16,139.00

40,347.50

 

 

 

55,147.50

 

55,147.50

 

 

 

 

 

Partners’ Capital Accounts

Cr.

 

 

 

 

Dr.

Particulars

Kalu

Rs

Lalu
Rs

Particulars

Kalu

Rs

Lalu
Rs

Drawings A/c

3,500

2,400

Balance b/d

50,000

30,000

Interest on Drawings A/c

87.50

60

Interest on Capital A/c

2,500

1,500

 

 

 

Partners’ Salary A/c

6,000

4,800

Balance c/d

79,121

49,979

P/L Appropriation A/c

24,208.50

16,139

 

82,708.50

52,439

 

82,708.50

52,439

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Interest on Drawings

WN 3 Calculation of Profit Share of each Partner

Profit available for Distribution = 55,000 + 147.50 − 4,000 − 10,800 = Rs 40,347.50

Profit sharing ratio = 3 : 2

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2015

Dr.   Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital:

 

Profit (after Salary)

21,000

P

2,000

 

 

 

Q

1,500

 

 

 

R

1,500

5,000

 

 

Profit transferred to:

 

 

 

P’s Capital A/c

7,000

 

 

 

Q’s Capital A/c

5,000

 

 

 

R’s Capital A/c

4,000

16,000

 

 

 

21,000

 

21,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

P

Q

R

Particulars

P

Q

R

Drawings A/c

10,000

10,000

10,000

Balance b/d

40,000

30,000

30,000

 

 

 

 

Salaries A/c

-

6,000

4,000

 

 

 

 

Interest Capital A/c

2,000

1,500

1,500

Balance c/d

39,000

32,500

29,500

P/L Appropriation A/c

7,000

5,000

4,000

 

49,000

32,500

29,500

 

49,000

42,500

39,500

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on P's Capital = 40,000×5100=Rs 2,000Interest on Q's Capital = 30,000×5100=Rs 1,500Interest on R's Capital = 30,000×5100=Rs 1,500


WN 2 Calculation of Profit Share of each Partner

Profit available for distribution = 21,000 − 5000 = Rs 16,000

  1. Distribution of first Rs 10,000 (50%, 30% and 20%)

        

  1. Distribution of Remaining Profit i.e. Rs 6,000 (16,000 − 10,000) equally

        

Therefore,



Page No 2.84:

Question 36:

Profit and Loss Appropriation Account

for the year ended March 31, 2015

Dr.   Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital:

 

Profit (after Salary)

21,000

P

2,000

 

 

 

Q

1,500

 

 

 

R

1,500

5,000

 

 

Profit transferred to:

 

 

 

P’s Capital A/c

7,000

 

 

 

Q’s Capital A/c

5,000

 

 

 

R’s Capital A/c

4,000

16,000

 

 

 

21,000

 

21,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

P

Q

R

Particulars

P

Q

R

Drawings A/c

10,000

10,000

10,000

Balance b/d

40,000

30,000

30,000

 

 

 

 

Salaries A/c

-

6,000

4,000

 

 

 

 

Interest Capital A/c

2,000

1,500

1,500

Balance c/d

39,000

32,500

29,500

P/L Appropriation A/c

7,000

5,000

4,000

 

49,000

32,500

29,500

 

49,000

42,500

39,500

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on P's Capital = 40,000×5100=Rs 2,000Interest on Q's Capital = 30,000×5100=Rs 1,500Interest on R's Capital = 30,000×5100=Rs 1,500


WN 2 Calculation of Profit Share of each Partner

Profit available for distribution = 21,000 − 5000 = Rs 16,000

  1. Distribution of first Rs 10,000 (50%, 30% and 20%)

        

  1. Distribution of Remaining Profit i.e. Rs 6,000 (16,000 − 10,000) equally

        

Therefore,

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2015
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital (WN1)   Profit and Loss A/c (Net Profit) 44,490
P
1,800   Interest on Drawings (WN2)  
Q
2,340  
Q
68  
R
1,460 5,600
R
132 200
Salary to P 12,000    
Commission to R 1,290    
Profit transferred to:      
P’s Capital A/c
12,900      
Q’s Capital A/c
7,740      
R’s Capital A/c
5,160 25,800    
  44,690   44,690
       

WN 1: Calculation of Interest on Capital
P= 30,000×6100=Rs 1,800
For QInterest on Capital for 9 months =40,000×6100×912=Rs 1,800Add: Interest on Capital for 3 months = 36,000×6100×312=Rs 540Total Interest on Capital = Rs 2,340

Total Interest on Capital = 1,800 + 540 = Rs 2,340

For RInterest on Capital for 11 months = 24,000×6100×1112=Rs 1,320Add: Interest on Capital for 1 month = 28,000×6100×112=Rs 140Total Interest on Capital = Rs 1,460

WN 2: Calculation of Interest on Drawings

Year (2014) Drawings × Period = Product
Aug. 01 1,000 × 8 = 8,000
Nov. 30 1,400 × 4 = 5,600
Sum of Product 13,600
   
Interest on Q’s Drawings= 13,600×6100×112=Rs 68
Interest on R’s Drawings made at the end = 4,800×6100×5.512=Rs 132
WN 3: Calculation of Commission to R
Profit after interest on drawings and capital and salary = 44,490 - 5,600 - 12,000 + 200 = Rs 27,090
Commission= 27,090×5105=Rs 1,290

Page No 2.84:

Question 37:

Profit and Loss Appropriation Account
for the year ended 31st March, 2015
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital (WN1)   Profit and Loss A/c (Net Profit) 44,490
P
1,800   Interest on Drawings (WN2)  
Q
2,340  
Q
68  
R
1,460 5,600
R
132 200
Salary to P 12,000    
Commission to R 1,290    
Profit transferred to:      
P’s Capital A/c
12,900      
Q’s Capital A/c
7,740      
R’s Capital A/c
5,160 25,800    
  44,690   44,690
       

WN 1: Calculation of Interest on Capital
P= 30,000×6100=Rs 1,800
For QInterest on Capital for 9 months =40,000×6100×912=Rs 1,800Add: Interest on Capital for 3 months = 36,000×6100×312=Rs 540Total Interest on Capital = Rs 2,340

Total Interest on Capital = 1,800 + 540 = Rs 2,340

For RInterest on Capital for 11 months = 24,000×6100×1112=Rs 1,320Add: Interest on Capital for 1 month = 28,000×6100×112=Rs 140Total Interest on Capital = Rs 1,460

WN 2: Calculation of Interest on Drawings

Year (2014) Drawings × Period = Product
Aug. 01 1,000 × 8 = 8,000
Nov. 30 1,400 × 4 = 5,600
Sum of Product 13,600
   
Interest on Q’s Drawings= 13,600×6100×112=Rs 68
Interest on R’s Drawings made at the end = 4,800×6100×5.512=Rs 132
WN 3: Calculation of Commission to R
Profit after interest on drawings and capital and salary = 44,490 - 5,600 - 12,000 + 200 = Rs 27,090
Commission= 27,090×5105=Rs 1,290

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on  Capital:

 

Profit and Loss A/c (Net Profit)

1,50,000

A

9,000

 

 

 

B

5,400

14,400

 

 

B’s Salary

18,000

 

 

Partner’s  Commission

 

 

 

A

18,000

 

 

 

B

4,743

22,743

 

 

Profit transferred to:

 

 

 

A’s Capital A/c

71,143

 

 

 

B’s Capital A/c

23,714

94,857

 

 

 

50,000

 

1,50,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

Cr.

Particulars

A

B

Particulars

A

B

Drawings A/c

24,000

18,000

Balance b/d

1,50,000

90,000

 

 

 

Interest on Capital A/c

9,000

5,400

 

 

 

Commission A/c

18,000

4,743

 

 

 

Salary A/c

 

18,000

Balance c/d

2,24,143

1,23,857

P/L Appropriation A/c

71,143

23,714

 

2,48,143

1,41,857

 

2,48,143

1,41,857

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on A's Capital = 1,50,000 × 6100=9,000Interest on B's Capital = 90,000 × 6100=5,400

 

WN 2 Calculation of Commission to Partners

Commission to A = 2% on Turnover                           = 2100×9,00,000 = Rs 18,000


Commission to B = 5% on Profits after all Expense including such Commission

Profits after all expense = 1,50,000 14,400 18,000 − 18,000 = Rs 99,600

Commission to B = Profit after all Expenses × Rate100 + Rate                           = 99,600 × 5105= Rs 4,743

WN 3 Calculation of Profit Share of each Partner

Profit available for Distribution = 1,50,000 − 14,400 − 18,000 −18,000 − 4,743 = Rs 94,857

Profit sharing ratio = 3 : 1

A's Profit Share = 94,857 × 34=71,143B's Profit Share = 94,857  × 14=23,714

Page No 2.84:

Question 38:

Profit and Loss Appropriation Account

for the year ended March 31, 2015

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on  Capital:

 

Profit and Loss A/c (Net Profit)

1,50,000

A

9,000

 

 

 

B

5,400

14,400

 

 

B’s Salary

18,000

 

 

Partner’s  Commission

 

 

 

A

18,000

 

 

 

B

4,743

22,743

 

 

Profit transferred to:

 

 

 

A’s Capital A/c

71,143

 

 

 

B’s Capital A/c

23,714

94,857

 

 

 

50,000

 

1,50,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

Cr.

Particulars

A

B

Particulars

A

B

Drawings A/c

24,000

18,000

Balance b/d

1,50,000

90,000

 

 

 

Interest on Capital A/c

9,000

5,400

 

 

 

Commission A/c

18,000

4,743

 

 

 

Salary A/c

 

18,000

Balance c/d

2,24,143

1,23,857

P/L Appropriation A/c

71,143

23,714

 

2,48,143

1,41,857

 

2,48,143

1,41,857

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on A's Capital = 1,50,000 × 6100=9,000Interest on B's Capital = 90,000 × 6100=5,400

 

WN 2 Calculation of Commission to Partners

Commission to A = 2% on Turnover                           = 2100×9,00,000 = Rs 18,000


Commission to B = 5% on Profits after all Expense including such Commission

Profits after all expense = 1,50,000 14,400 18,000 − 18,000 = Rs 99,600

Commission to B = Profit after all Expenses × Rate100 + Rate                           = 99,600 × 5105= Rs 4,743

WN 3 Calculation of Profit Share of each Partner

Profit available for Distribution = 1,50,000 − 14,400 − 18,000 −18,000 − 4,743 = Rs 94,857

Profit sharing ratio = 3 : 1

A's Profit Share = 94,857 × 34=71,143B's Profit Share = 94,857  × 14=23,714

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 8%   Profit and Loss A/c (Net Profit) 3,77,500
X
20,000      
Y
16,000   Interest on Drawings (WN1)  
Z
14,000 50,000
X
4,200  
Salary  
Y
3,600  
Y
15,000  
Z
3,000 10,800
Z
22,500 37,500    
Transfer to Reserve 1,00,000    
Commission to X 18,255    
Profit transferred to:      
X’s Capital A/c
60,848      
Y’s Capital A/c
60,848      
Z’s Capital A/c
60,849 1,82,545    
  3,88,300   3,88,300
       

 

 

Partners’ Capital Accounts
Dr. Cr.
Date Particulars X Y Z Date Particulars X Y Z
2016         2015        
March 31 Drawings A/c 42,000 36,000 30,000 April 01 Balance b/d 2,50,000 2,00,000 1,75,000
March 31 Interest on Drawings A/c 4,200 3,600 3,000 2016        
March 31 Balance c/d 3,02,903 2,52,248 2,39,349 March 31 Interest on Capital A/c 20,000 16,000 14,000
          March 31 Salary A/c   15,000 22,500
          March 31 Commission A/c 18,255    
          March 31 P&L App. A/c 60,848 60,848 60,849
    3,49,103 2,91,848 2,72,349     3,49,103 2,91,848 2,72,349
                   

Working Notes:

WN 1: Calculation of Interest on Drawings
Interest on X's Drawings = (3,500 × 12) ×10100=Rs 4,200Interest on Y Drawings = (3,000 × 12) ×10100=Rs 3,600Interest on Z Drawings = (2,500 × 12) ×10100=Rs 3,000

Interest on Drawings is calculated without considering Time factor as the rate of interest given in the question doesn’t include the word “per annum”.

WN 2: Calculation of Commission to X
 
Net Distributable Profit = 3,88,300 – 50,000 – 37,500 – 1,00,000 = Rs 2,00,800
Commission = 2,00,800 × 10110 = Rs 18,255

Page No 2.84:

Question 39:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 8%   Profit and Loss A/c (Net Profit) 3,77,500
X
20,000      
Y
16,000   Interest on Drawings (WN1)  
Z
14,000 50,000
X
4,200  
Salary  
Y
3,600  
Y
15,000  
Z
3,000 10,800
Z
22,500 37,500    
Transfer to Reserve 1,00,000    
Commission to X 18,255    
Profit transferred to:      
X’s Capital A/c
60,848      
Y’s Capital A/c
60,848      
Z’s Capital A/c
60,849 1,82,545    
  3,88,300   3,88,300
       

 

 

Partners’ Capital Accounts
Dr. Cr.
Date Particulars X Y Z Date Particulars X Y Z
2016         2015        
March 31 Drawings A/c 42,000 36,000 30,000 April 01 Balance b/d 2,50,000 2,00,000 1,75,000
March 31 Interest on Drawings A/c 4,200 3,600 3,000 2016        
March 31 Balance c/d 3,02,903 2,52,248 2,39,349 March 31 Interest on Capital A/c 20,000 16,000 14,000
          March 31 Salary A/c   15,000 22,500
          March 31 Commission A/c 18,255    
          March 31 P&L App. A/c 60,848 60,848 60,849
    3,49,103 2,91,848 2,72,349     3,49,103 2,91,848 2,72,349
                   

Working Notes:

WN 1: Calculation of Interest on Drawings
Interest on X's Drawings = (3,500 × 12) ×10100=Rs 4,200Interest on Y Drawings = (3,000 × 12) ×10100=Rs 3,600Interest on Z Drawings = (2,500 × 12) ×10100=Rs 3,000

Interest on Drawings is calculated without considering Time factor as the rate of interest given in the question doesn’t include the word “per annum”.

WN 2: Calculation of Commission to X
 
Net Distributable Profit = 3,88,300 – 50,000 – 37,500 – 1,00,000 = Rs 2,00,800
Commission = 2,00,800 × 10110 = Rs 18,255

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 15%   Profit and Loss A/c (Net Profit) 3,04,200
A
60,000      
B
45,000   Interest on Advances (WN1)  
C
30,000 1,35,000
A
3,600  
   
B
6,300  
   
C
900 10,800
Profit transferred to:      
A’s Capital A/c
80,000      
B’s Capital A/c
60,000      
C’s Capital A/c
40,000 1,80,000    
  3,15,000   3,15,000
       

 

Partners’ Capital Accounts
Dr. Cr.
Particulars A B C Particulars A B C
        Balance b/d 4,00,000 3,00,000 2,00,000
Balance c/d 4,00,000 3,00,000 2,00,000        
  4,00,000 3,00,000 2,00,000   4,00,000 3,00,000 2,00,000
               

 

Partners’ Current Accounts
Dr. Cr.
Particulars A B C Particulars A B C
Drawings A/c 70,000 95,000 30,000 Balance b/d 11,520 18,640 5,760
Interest on Advances A/c 3,600 6,300 900 Int. on Cap. A/c 60,000 45,000 30,000
        P&L App. A/c 80,000 60,000 40,000
Balance c/d 77,920 22,340 44,860        
  1,51,520 1,23,640 75,760   1,51,520 1,23,640 75,760
               

Working Notes: Calculation of Interest on Advances
Interest for A = 40,000 (70,000 - 30,000) ×18100×612=Rs 3,600Interest for B = 70,000 (95,000 - 25,000)×18100×612=Rs 6,300Interest for C = 10,000 (30,000 - 20,000) ×18100×612=Rs 900

Note: Interest on advances is calculated for an average period of six months because date of withdrawal is not given.



Page No 2.85:

Question 40:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 15%   Profit and Loss A/c (Net Profit) 3,04,200
A
60,000      
B
45,000   Interest on Advances (WN1)  
C
30,000 1,35,000
A
3,600  
   
B
6,300  
   
C
900 10,800
Profit transferred to:      
A’s Capital A/c
80,000      
B’s Capital A/c
60,000      
C’s Capital A/c
40,000 1,80,000    
  3,15,000   3,15,000
       

 

Partners’ Capital Accounts
Dr. Cr.
Particulars A B C Particulars A B C
        Balance b/d 4,00,000 3,00,000 2,00,000
Balance c/d 4,00,000 3,00,000 2,00,000        
  4,00,000 3,00,000 2,00,000   4,00,000 3,00,000 2,00,000
               

 

Partners’ Current Accounts
Dr. Cr.
Particulars A B C Particulars A B C
Drawings A/c 70,000 95,000 30,000 Balance b/d 11,520 18,640 5,760
Interest on Advances A/c 3,600 6,300 900 Int. on Cap. A/c 60,000 45,000 30,000
        P&L App. A/c 80,000 60,000 40,000
Balance c/d 77,920 22,340 44,860        
  1,51,520 1,23,640 75,760   1,51,520 1,23,640 75,760
               

Working Notes: Calculation of Interest on Advances
Interest for A = 40,000 (70,000 - 30,000) ×18100×612=Rs 3,600Interest for B = 70,000 (95,000 - 25,000)×18100×612=Rs 6,300Interest for C = 10,000 (30,000 - 20,000) ×18100×612=Rs 900

Note: Interest on advances is calculated for an average period of six months because date of withdrawal is not given.

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount
Rs
Interest on Capital @ 5%   Profit and Loss A/c 3,96,000
X
24,000   (4,44,000 - 48,000)  
Y
20,000 44,000 Interest on Drawings (WN1)  
   
X
312  
Salary to X @10% of Net Profit 39,600
Y
432  
Commission to Y (WN2) 35,640
Z
528 1,272
Profit transferred to:      
X’s Capital A/c
1,39,016      
Y’s Capital A/c
69,508      
Z’s Capital A/c
69,508 2,78,032    
  3,97,272   3,97,272
       

Working Notes:
WN 1: Calculation of Interest on Drawings
Interest on X's Drawings made in the beginning = (800 × 12) ×6100×6.512=Rs 312Interest on Y's Drawings made in the middle = (1,200 × 12) ×6100×612=Rs 432Interest on Z's Drawings made at the end = (1,600 × 12) ×6100×5.512=Rs 528

WN 2: Calculation of Commission
Commission to Y after charging X’s Salary:
Profit after X’s Salary = 3,96,000 – 39,600 =  Rs 3,56,400
Commission  = 3,56,400 ×10100=Rs 35,640

Page No 2.85:

Question 41:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount
Rs
Interest on Capital @ 5%   Profit and Loss A/c 3,96,000
X
24,000   (4,44,000 - 48,000)  
Y
20,000 44,000 Interest on Drawings (WN1)  
   
X
312  
Salary to X @10% of Net Profit 39,600
Y
432  
Commission to Y (WN2) 35,640
Z
528 1,272
Profit transferred to:      
X’s Capital A/c
1,39,016      
Y’s Capital A/c
69,508      
Z’s Capital A/c
69,508 2,78,032    
  3,97,272   3,97,272
       

Working Notes:
WN 1: Calculation of Interest on Drawings
Interest on X's Drawings made in the beginning = (800 × 12) ×6100×6.512=Rs 312Interest on Y's Drawings made in the middle = (1,200 × 12) ×6100×612=Rs 432Interest on Z's Drawings made at the end = (1,600 × 12) ×6100×5.512=Rs 528

WN 2: Calculation of Commission
Commission to Y after charging X’s Salary:
Profit after X’s Salary = 3,96,000 – 39,600 =  Rs 3,56,400
Commission  = 3,56,400 ×10100=Rs 35,640

Answer:

Profit and Loss Appropriation Account
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital (WN1)   Profit and Loss A/c 10,50,000
Ram
7,500   (10,35,000 + 15,000)  
Shyam
5,000   Interest on Drawings (WN2)  
Mohan
3,750 16,250
Ram
105  
Salary to Mohan 15,000
Shyam
135  
Interest on Current A/c to Ram
60,000×4100×612 
1,200
Mohan
150 390
Commission to Ram (WN4) 52,500 Interest on Current A/c (WN3)  
Commission to Shyam (WN4) 50,000
Shyam 42,750×4100×612
855  
Profit transferred to:  
Mohan 32,750×4100×612
655 1,510
Ram’s Capital A/c
3,66,780      
Shyam’s Capital A/c
3,66,780      
Mohan’s Capital A/c
1,83,390 9,16,950    
  10,51,900   10,51,900
       

Working Notes:
WN 1: Calculation of Interest on Capital
Ram = 3,00,000 × 5100 × 612 = Rs 7,500Shyam = 2,00,000 × 5100 × 612 = Rs 5,000Mohan = 1,50,000 × 5100 × 612 = Rs 3,750

WN 2: Calculation of Interest on Drawings:
Interest on Ram’s Drawings made in the beginning= (1,000 × 6) × 6100 × 3.512=Rs 105Interest on Shyam’s Drawings (drawn during six months) = 9,000 × 6100 × 312=Rs 135Interest on Mohan’s Drawings made at the end = (2,000 × 6) × 6100 × 2.512=Rs 150

WN 3: Calculation of Interest on Current Account
Ram (Cr. Balance) = 60,000 × 4100 × 612 = Rs 1,200Shyam (Dr. Balance) = 42,750 × 4100 × 612 = Rs 855Mohan (Dr. Balance) = 32,750 × 4100 × 612 = Rs 655

WN 4: Calculation of Commission
Ram (before charging) = 10,50,000 × 5100 = 52,500Shyam (after charging) = 10,50,000 × 5105 = 50,000

Page No 2.85:

Question 42:

Profit and Loss Appropriation Account
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital (WN1)   Profit and Loss A/c 10,50,000
Ram
7,500   (10,35,000 + 15,000)  
Shyam
5,000   Interest on Drawings (WN2)  
Mohan
3,750 16,250
Ram
105  
Salary to Mohan 15,000
Shyam
135  
Interest on Current A/c to Ram
60,000×4100×612 
1,200
Mohan
150 390
Commission to Ram (WN4) 52,500 Interest on Current A/c (WN3)  
Commission to Shyam (WN4) 50,000
Shyam 42,750×4100×612
855  
Profit transferred to:  
Mohan 32,750×4100×612
655 1,510
Ram’s Capital A/c
3,66,780      
Shyam’s Capital A/c
3,66,780      
Mohan’s Capital A/c
1,83,390 9,16,950    
  10,51,900   10,51,900
       

Working Notes:
WN 1: Calculation of Interest on Capital
Ram = 3,00,000 × 5100 × 612 = Rs 7,500Shyam = 2,00,000 × 5100 × 612 = Rs 5,000Mohan = 1,50,000 × 5100 × 612 = Rs 3,750

WN 2: Calculation of Interest on Drawings:
Interest on Ram’s Drawings made in the beginning= (1,000 × 6) × 6100 × 3.512=Rs 105Interest on Shyam’s Drawings (drawn during six months) = 9,000 × 6100 × 312=Rs 135Interest on Mohan’s Drawings made at the end = (2,000 × 6) × 6100 × 2.512=Rs 150

WN 3: Calculation of Interest on Current Account
Ram (Cr. Balance) = 60,000 × 4100 × 612 = Rs 1,200Shyam (Dr. Balance) = 42,750 × 4100 × 612 = Rs 855Mohan (Dr. Balance) = 32,750 × 4100 × 612 = Rs 655

WN 4: Calculation of Commission
Ram (before charging) = 10,50,000 × 5100 = 52,500Shyam (after charging) = 10,50,000 × 5105 = 50,000

Answer:

Profit and Loss Account

for the year ended March 31,2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Manager’s Commission

750

Profit before B’s Salary

15,000

(5% of Rs 15,000)

 

(12,500+2,500)

 

Profit transferred to Profit and Loss Appropriation Account

14,250

 

 

 

15,000

 

15,000

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended March 31,2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

14,250

A

3,000

 

 

 

B

1,800

4,800

 

 

B’s Salary

2,500

 

 

Profit transferred to:

 

 

 

A’s Capital A/c

4,170

 

 

 

B’s Capital A/c

2,780

6,950

 

 

 

14,250

 

14,250

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

A

B

Particulars

A

B

Balance c/d

57,170

37,080

Balance b/d

50,000

30,000

 

 

 

Interest on Capital A/c

3,000

1,800

 

 

 

Salary A/c

 

2,500

 

 

 

P/L Appropriation A/c

4,170

2,780

 

57,170

37,080

 

57,170

37,080

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Managers’ Commission

1. Managers’ Commission = 5% on Net Profit (before Salary)

Profit before Salary = Profit after Salary + Salary = 12,500 + 2500 = Rs 15,000

WN 2 Calculation of Interest on Capital

WN 3 Calculation of Profit Share of each Partner

Profit available for distribution = 12,500 − 750 − 3,000 − 1,800 = Rs 6,950

Profit sharing ratio = 3 : 2



Page No 2.86:

Question 43:

Profit and Loss Account

for the year ended March 31,2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Manager’s Commission

750

Profit before B’s Salary

15,000

(5% of Rs 15,000)

 

(12,500+2,500)

 

Profit transferred to Profit and Loss Appropriation Account

14,250

 

 

 

15,000

 

15,000

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended March 31,2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

14,250

A

3,000

 

 

 

B

1,800

4,800

 

 

B’s Salary

2,500

 

 

Profit transferred to:

 

 

 

A’s Capital A/c

4,170

 

 

 

B’s Capital A/c

2,780

6,950

 

 

 

14,250

 

14,250

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

A

B

Particulars

A

B

Balance c/d

57,170

37,080

Balance b/d

50,000

30,000

 

 

 

Interest on Capital A/c

3,000

1,800

 

 

 

Salary A/c

 

2,500

 

 

 

P/L Appropriation A/c

4,170

2,780

 

57,170

37,080

 

57,170

37,080

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Managers’ Commission

1. Managers’ Commission = 5% on Net Profit (before Salary)

Profit before Salary = Profit after Salary + Salary = 12,500 + 2500 = Rs 15,000

WN 2 Calculation of Interest on Capital

WN 3 Calculation of Profit Share of each Partner

Profit available for distribution = 12,500 − 750 − 3,000 − 1,800 = Rs 6,950

Profit sharing ratio = 3 : 2

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Salary to A (500 × 12)

6,000

Profit and Loss A/c

50,000

Interest on Capital:

 

 

 

A

3,000

 

 

 

B

4,500

7,500

 

 

Profit transferred to :

 

 

 

A’s Capital A/c

18,250

 

 

 

B’s Capital A/c

18,250

36,500

 

 

 

50,000

 

50,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

Cr.

Particulars

A

B

Particulars

A

B

Drawings A/c

15,000

20,000

Balance b/d

50,000

1,00,000

 

 

 

Salary A/c

6,000

-

 

 

 

Interest on Capital A/c

3,000

4,500

Balance c/d

62,250

1,02,750

P/L Appropriation A/c

18,250

18,250

 

77,250

1,22,750

 

77,250

1,22,750

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on A's Capital = 50,000 × 6100= Rs 3,000Interest on B's Capital for 9 months = 1,00,000 × 6100×912= Rs 4,500(from July 01, 2015 to March 31, 2016)

 

WN 2 Calculation of Profit Share of each Partner

Profit available for distribution = Rs 50,000 − 6,000 − 7,500 = 36,500

Page No 2.86:

Question 44:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Salary to A (500 × 12)

6,000

Profit and Loss A/c

50,000

Interest on Capital:

 

 

 

A

3,000

 

 

 

B

4,500

7,500

 

 

Profit transferred to :

 

 

 

A’s Capital A/c

18,250

 

 

 

B’s Capital A/c

18,250

36,500

 

 

 

50,000

 

50,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

Cr.

Particulars

A

B

Particulars

A

B

Drawings A/c

15,000

20,000

Balance b/d

50,000

1,00,000

 

 

 

Salary A/c

6,000

-

 

 

 

Interest on Capital A/c

3,000

4,500

Balance c/d

62,250

1,02,750

P/L Appropriation A/c

18,250

18,250

 

77,250

1,22,750

 

77,250

1,22,750

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Interest on A's Capital = 50,000 × 6100= Rs 3,000Interest on B's Capital for 9 months = 1,00,000 × 6100×912= Rs 4,500(from July 01, 2015 to March 31, 2016)

 

WN 2 Calculation of Profit Share of each Partner

Profit available for distribution = Rs 50,000 − 6,000 − 7,500 = 36,500

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.   Cr.
Particulars Amount
Rs
Particulars Amount Rs
Interest on Capital @ 5%   Profit and Loss A/c (Net Profit) 71,400
A
12,500      
B
6,500   Interest on Drawings @ 6 %  
C
6,000 25,000
A
2,250  
Salary:  
B
1,125  
B
16,000  
C
725 4,100
C
14,500 30,500    
Profit transferred to:      
A’s Capital A/c
10,000      
B’s Capital A/c
6,000      
C’s Capital A/c
4,000 20,000    
  75,500   75,500
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars A B C Date Particulars A B C
2016         2015        
March 31 Drawings A/c 40,000 25,000 15,000 April 01 Balance b/d 2,50,000 1,30,000 1,20,000
March 31 Interest on Drawings A/c 2,250 1,125 725 2016        
March 31 Balance c/d 2,30,250 1,32,375 1,28,775 March 31 Int. on Cap. A/c 12,500 6,500 6,000
          March 31 Salary A/c   16,000 14,500
          March 31 P&L App. A/c 10,000 6,000 4,000
    2,72,500 1,58,500 1,44,500     2,72,500 1,58,500 1,44,500
                   

Page No 2.86:

Question 45:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.   Cr.
Particulars Amount
Rs
Particulars Amount Rs
Interest on Capital @ 5%   Profit and Loss A/c (Net Profit) 71,400
A
12,500      
B
6,500   Interest on Drawings @ 6 %  
C
6,000 25,000
A
2,250  
Salary:  
B
1,125  
B
16,000  
C
725 4,100
C
14,500 30,500    
Profit transferred to:      
A’s Capital A/c
10,000      
B’s Capital A/c
6,000      
C’s Capital A/c
4,000 20,000    
  75,500   75,500
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars A B C Date Particulars A B C
2016         2015        
March 31 Drawings A/c 40,000 25,000 15,000 April 01 Balance b/d 2,50,000 1,30,000 1,20,000
March 31 Interest on Drawings A/c 2,250 1,125 725 2016        
March 31 Balance c/d 2,30,250 1,32,375 1,28,775 March 31 Int. on Cap. A/c 12,500 6,500 6,000
          March 31 Salary A/c   16,000 14,500
          March 31 P&L App. A/c 10,000 6,000 4,000
    2,72,500 1,58,500 1,44,500     2,72,500 1,58,500 1,44,500
                   

Answer:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital:

 

Profit and Loss A/c

45,000

A

2,500

 

 

 

B

1,500

 

 

 

C

1,000

5,000

 

 

Salary to:

 

 

 

B

5,000

 

 

 

C

5,000

10,000

 

 

Profit transferred to:

 

 

 

A’s Current A/c

15,000

 

 

 

B’s Current A/c

9,000

 

 

 

C’s Current A/c

6,000

30,000

 

 

 

45,000

 

45,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

A

B

C

Particulars

A

B

C

 

 

 

 

Balance b/d

50,000

30,000

20,000

Balance c/d

50,000

30,000

20,000

 

 

 

 

 

50,000

30,000

20,000

 

50,000

30,000

20,000

 

 

 

 

 

 

 

 

 

Partners’ Current Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

A

B

C

Particulars

A

B

C

Drawings A/c

10,000

7,500

6,000

Balance b/d

4,500

1,500

1,000

 

 

 

 

Interest on Capital A/c

2,500

1,500

1,000

 

 

 

 

Salaries A/c

 

5,000

5,000

Balance c/d

12,000

9,500

7,000

P/L Appropriation A/c

15,000

9,000

6,000

 

22,000

17,000

13,000

 

22,000

17,000

13,000

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Profit Share of each Partner

Profit available for Distribution = 45,000 − 15,000 = Rs 30,000

Page No 2.86:

Question 46:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital:

 

Profit and Loss A/c

45,000

A

2,500

 

 

 

B

1,500

 

 

 

C

1,000

5,000

 

 

Salary to:

 

 

 

B

5,000

 

 

 

C

5,000

10,000

 

 

Profit transferred to:

 

 

 

A’s Current A/c

15,000

 

 

 

B’s Current A/c

9,000

 

 

 

C’s Current A/c

6,000

30,000

 

 

 

45,000

 

45,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

A

B

C

Particulars

A

B

C

 

 

 

 

Balance b/d

50,000

30,000

20,000

Balance c/d

50,000

30,000

20,000

 

 

 

 

 

50,000

30,000

20,000

 

50,000

30,000

20,000

 

 

 

 

 

 

 

 

 

Partners’ Current Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

A

B

C

Particulars

A

B

C

Drawings A/c

10,000

7,500

6,000

Balance b/d

4,500

1,500

1,000

 

 

 

 

Interest on Capital A/c

2,500

1,500

1,000

 

 

 

 

Salaries A/c

 

5,000

5,000

Balance c/d

12,000

9,500

7,000

P/L Appropriation A/c

15,000

9,000

6,000

 

22,000

17,000

13,000

 

22,000

17,000

13,000

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Profit Share of each Partner

Profit available for Distribution = 45,000 − 15,000 = Rs 30,000

Answer:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 5%   Profit and Loss A/c (Net Profit) 15,000
Satish
2,500      
Parkash
1,500 4,000 Interest on Drawings (WN1)  
   
Satish
120  
Salary to Satish 1,200
Parkash
80 200
Profit transferred to (WN2)      
Satish’s Capital A/c
5,400      
Parkash’s Capital A/c
4,600 10,000    
  15,200   15,200
       

 

Partners’ Capital Accounts
Dr.   Cr.
Particulars Satish Parkash Particulars Satish Parkash
      Balance b/d 50,000 30,000
Balance c/d 50,000 30,000      
  50,000 30,000   50,000 30,000
           

 

 

Partners’ Current Accounts
Dr.   Cr.
Particulars Satish Parkash Particulars Satish Parkash
Drawings A/c 3,000 3,000 Balance b/d 1,500 2,000
Interest on Drawings A/c 120 80 Interest on Capital A/c 2,500 1,500
      Salary 1,200  
      P&L Appropriation A/c 5,400 4,600
Balance c/d 7,480 5,020      
  10,600 8,100   10,600 8,100
           

Working Notes:
WN 1: Calculation of Interest on Drawings

Particulars Satish Parkash
Amount Withdrawn 3,000 3,000
Less: Balance of Current A/c
1,500 2,000
Net Amount 1,500 1,000
Interest 1,500 × 8100 = Rs 120 1,000 × 8100 = Rs 80

WN 2: Calculation of profit transferred to Partners’ Capital Accounts
Net Distributable Profit = 15,200 - 5,200 = Rs 10,000
First Rs 4,000 to be distributed in 60:40 ratio to Satish and Parkash respectively:
Satish: 4,000 × 0.6 =Rs 2,400 and Parkash = 4,000 × 0.4 = Rs 1,600
Remaining profit of Rs 6,000 to be distributed equally i.e, Rs 3,000 each.
Total Satish’s Profit = 2,400 + 3,000 = Rs 5,400
Total Parkash’s Profit = 1,600 + 3,000 = Rs 4,600



Page No 2.87:

Question 47:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 5%   Profit and Loss A/c (Net Profit) 15,000
Satish
2,500      
Parkash
1,500 4,000 Interest on Drawings (WN1)  
   
Satish
120  
Salary to Satish 1,200
Parkash
80 200
Profit transferred to (WN2)      
Satish’s Capital A/c
5,400      
Parkash’s Capital A/c
4,600 10,000    
  15,200   15,200
       

 

Partners’ Capital Accounts
Dr.   Cr.
Particulars Satish Parkash Particulars Satish Parkash
      Balance b/d 50,000 30,000
Balance c/d 50,000 30,000      
  50,000 30,000   50,000 30,000
           

 

 

Partners’ Current Accounts
Dr.   Cr.
Particulars Satish Parkash Particulars Satish Parkash
Drawings A/c 3,000 3,000 Balance b/d 1,500 2,000
Interest on Drawings A/c 120 80 Interest on Capital A/c 2,500 1,500
      Salary 1,200  
      P&L Appropriation A/c 5,400 4,600
Balance c/d 7,480 5,020      
  10,600 8,100   10,600 8,100
           

Working Notes:
WN 1: Calculation of Interest on Drawings

Particulars Satish Parkash
Amount Withdrawn 3,000 3,000
Less: Balance of Current A/c
1,500 2,000
Net Amount 1,500 1,000
Interest 1,500 × 8100 = Rs 120 1,000 × 8100 = Rs 80

WN 2: Calculation of profit transferred to Partners’ Capital Accounts
Net Distributable Profit = 15,200 - 5,200 = Rs 10,000
First Rs 4,000 to be distributed in 60:40 ratio to Satish and Parkash respectively:
Satish: 4,000 × 0.6 =Rs 2,400 and Parkash = 4,000 × 0.4 = Rs 1,600
Remaining profit of Rs 6,000 to be distributed equally i.e, Rs 3,000 each.
Total Satish’s Profit = 2,400 + 3,000 = Rs 5,400
Total Parkash’s Profit = 1,600 + 3,000 = Rs 4,600

Answer:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

25,200

A

1,500

 

Interest on Drawings A/c:

 

B

1,000

2,500

A

400

 

Salary to B (600 × 12)

7,200

B

350

750

Commission to A (60,000 × 5%)

3,000

 

 

Profit transferred to:

 

 

 

A’s Capital A/c (13,250/2)

6,625

 

 

 

B’s Capital A/c (13,250/2)

6,625

13,250

 

 

 

25,950

 

25,950

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

A

B

Particulars

A

B

Drawings A/c

8,000

7,000

Balance b/d

30,000

20,000

Interest on Drawings A/c

400

350

Interest on Capital A/c

1,500

1,000

 

 

 

Salary A/c

-

7,200

 

 

 

Commission A/c

3,000

-

Balance c/d

32,725

27,475

P/L Appropriation A/c

6,625

6,625

 

41,125

34,825

 

41,125

34,825

 

 

 

 

 

 

Working Notes:
WN 1 Calculation of Interest on Capital

WN 2 Calculation of Interest on Drawings

WN 3 Calculation of Profit Share of each Partner
 
Profit available for Distribution = 25,200 + 750 – 2,500 – 7,200 – 3,000 = 13,250

Page No 2.87:

Question 48:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital A/c:

 

Profit and Loss A/c

25,200

A

1,500

 

Interest on Drawings A/c:

 

B

1,000

2,500

A

400

 

Salary to B (600 × 12)

7,200

B

350

750

Commission to A (60,000 × 5%)

3,000

 

 

Profit transferred to:

 

 

 

A’s Capital A/c (13,250/2)

6,625

 

 

 

B’s Capital A/c (13,250/2)

6,625

13,250

 

 

 

25,950

 

25,950

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

A

B

Particulars

A

B

Drawings A/c

8,000

7,000

Balance b/d

30,000

20,000

Interest on Drawings A/c

400

350

Interest on Capital A/c

1,500

1,000

 

 

 

Salary A/c

-

7,200

 

 

 

Commission A/c

3,000

-

Balance c/d

32,725

27,475

P/L Appropriation A/c

6,625

6,625

 

41,125

34,825

 

41,125

34,825

 

 

 

 

 

 

Working Notes:
WN 1 Calculation of Interest on Capital

WN 2 Calculation of Interest on Drawings

WN 3 Calculation of Profit Share of each Partner
 
Profit available for Distribution = 25,200 + 750 – 2,500 – 7,200 – 3,000 = 13,250

Answer:

Profit and Loss Appropriation Account

for the year ended March 31 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

 

Profit and Loss A/c

(3,50,000+12,000)

3,62,000

X’s Current A/c

4,000

 

Interest on Drawings

 

Y’s Current A/c

3,000

 

X’s Current A/c

1,560

 

Z’s Current A/c

1,500

8,500

Y’s Current A/c

2,640

 

Z’s Current A/c (Interest)

960

Z’s Current A/c

540

4,740

Commission to:

 

Interest on Current A/c

 

X ’s Current A/c

18,100

 

X’s Current A/c

684

 

Y ’s Current A/c

17,238

35,338

Y’s Current A/c

524

1,208

Z’s Current A/c (Salary)

12,000

 

 

Profit transferred to:

 

 

 

X’s Current A/c

1,24,460

 

 

 

Y’s Current A/c

1,24,460

 

 

 

Z’s Current A/c

62,230

3,11,150

 

 

 

3,67,948

 

3,67,948

 

 

 

 

Working Notes:

Calculation of Interest on Capital

X=80,000×5100=Rs 4,000Y=60,000×5100=Rs 3,000Z=30,000×5100=Rs 1,500


Calculation of Interest on Current Account Balances

Interest allowed on Z's Current Account Balance=24,000×4100=Rs 960 (Credit)Interest charged on X's Current Account Balance=17,100×4100=Rs 684 (Debit)Interest charged on Y's Current Account Balance=13,100×4100=Rs 524 (Debit)

Calculation of Interest on Drawings

X=48,000×6100×6.512=Rs 1,560Y=96,000×6100×5.512=Rs 2,640Z=18,000×6100×612=Rs 540

Calculation of Commission

Corrected Profit=3,50,000+12,000=Rs 3,62,000X's Commission=3,62,000×5100=Rs 18,100Y's Commission=3,62,000×5105=Rs 17,238

Page No 2.87:

Question 49:

Profit and Loss Appropriation Account

for the year ended March 31 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

 

Profit and Loss A/c

(3,50,000+12,000)

3,62,000

X’s Current A/c

4,000

 

Interest on Drawings

 

Y’s Current A/c

3,000

 

X’s Current A/c

1,560

 

Z’s Current A/c

1,500

8,500

Y’s Current A/c

2,640

 

Z’s Current A/c (Interest)

960

Z’s Current A/c

540

4,740

Commission to:

 

Interest on Current A/c

 

X ’s Current A/c

18,100

 

X’s Current A/c

684

 

Y ’s Current A/c

17,238

35,338

Y’s Current A/c

524

1,208

Z’s Current A/c (Salary)

12,000

 

 

Profit transferred to:

 

 

 

X’s Current A/c

1,24,460

 

 

 

Y’s Current A/c

1,24,460

 

 

 

Z’s Current A/c

62,230

3,11,150

 

 

 

3,67,948

 

3,67,948

 

 

 

 

Working Notes:

Calculation of Interest on Capital

X=80,000×5100=Rs 4,000Y=60,000×5100=Rs 3,000Z=30,000×5100=Rs 1,500


Calculation of Interest on Current Account Balances

Interest allowed on Z's Current Account Balance=24,000×4100=Rs 960 (Credit)Interest charged on X's Current Account Balance=17,100×4100=Rs 684 (Debit)Interest charged on Y's Current Account Balance=13,100×4100=Rs 524 (Debit)

Calculation of Interest on Drawings

X=48,000×6100×6.512=Rs 1,560Y=96,000×6100×5.512=Rs 2,640Z=18,000×6100×612=Rs 540

Calculation of Commission

Corrected Profit=3,50,000+12,000=Rs 3,62,000X's Commission=3,62,000×5100=Rs 18,100Y's Commission=3,62,000×5105=Rs 17,238

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (Net Profit)

31,500

A’s Capital A/c

16,000

 

 

 

B’s Capital A/c

8,000

 

 

 

C’s Capital A/c

7,500

31,500

 

 

 

31,500

 

31,500

 

 

 

 

Working Notes:

Profit for the year = Rs 31,500

Profit sharing ratio = 4 : 2 : 1

C is given a guarantee of minimum profit of Rs 7,500

C’s Actual Profit Share (i.e. Rs 4,500) is less than his Minimum Guaranteed Profit (i.e. Rs 7,500) Deficiency in C’s Profit Share = 7,500 − 4,500 = Rs 3,000

This deficiency is to be borne by A and B in their profit sharing ratio i.e. 4 : 2

Therefore,

Final Profit Share of A = 18,000 2,000 = Rs 16,000

Final Profit Share of B = 9,000 1,000 = Rs 8,000

Final Profit Share of C = 4,500 + 3,000 = Rs 7,500

Page No 2.87:

Question 50:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (Net Profit)

31,500

A’s Capital A/c

16,000

 

 

 

B’s Capital A/c

8,000

 

 

 

C’s Capital A/c

7,500

31,500

 

 

 

31,500

 

31,500

 

 

 

 

Working Notes:

Profit for the year = Rs 31,500

Profit sharing ratio = 4 : 2 : 1

C is given a guarantee of minimum profit of Rs 7,500

C’s Actual Profit Share (i.e. Rs 4,500) is less than his Minimum Guaranteed Profit (i.e. Rs 7,500) Deficiency in C’s Profit Share = 7,500 − 4,500 = Rs 3,000

This deficiency is to be borne by A and B in their profit sharing ratio i.e. 4 : 2

Therefore,

Final Profit Share of A = 18,000 2,000 = Rs 16,000

Final Profit Share of B = 9,000 1,000 = Rs 8,000

Final Profit Share of C = 4,500 + 3,000 = Rs 7,500

Answer:

Profit and Loss Appropriation Account
Dr.   Cr.
Particulars Amount Rs Particulars Amount Rs
Profit and Loss A/c (Net Loss) 4,50,000 Loss transferred to:  
   
X’s Capital A/c
1,50,000  
   
Y’s Capital A/c
1,50,000  
   
Z’s Capital A/c
1,50,000 4,50,000
  4,50,000   4,50,000
       

 

Partners’ Capital Accounts
Dr.     Cr.
Date Particulars X Y Z Date Particulars X Y Z
2016         2015        
March 31 P&L App. A/c 1,50,000 1,50,000 1,50,000 April 01 Balance b/d 15,00,000 12,00,000 9,00,000
          2016        
March 31 Z’s Capital A/c 1,50,000 1,50,000   March 31 X’s Capital A/c     1,50,000
March 31 Balance c/d 12,00,000 9,00,000 10,50,000   Y’s Capital A/c     1,50,000
    15,00,000 12,00,000 12,00,000     15,00,000 12,00,000 12,00,000
                   

Note: (i)  Loss of Rs 4,50,000 has been debited to each Partners Capital A/c equally, i.e. Rs 1,50,000 each

(ii) However, Z is guaranteed a minimum profit of Rs1,50,000. Therefore, he needs to be compensated for Rs 1,50,000 loss that has already been debited to his account and Rs 1,50,000 profit that is guaranteed to him.

(iii) The total of Rs 3,00,000 given to Z is to be compensated by X and Y equally and hence both of their accounts have been debited by Rs 1,50,000 each and Z’s Account is to be credited with Rs 3,00,000.



Page No 2.88:

Question 51:

Profit and Loss Appropriation Account
Dr.   Cr.
Particulars Amount Rs Particulars Amount Rs
Profit and Loss A/c (Net Loss) 4,50,000 Loss transferred to:  
   
X’s Capital A/c
1,50,000  
   
Y’s Capital A/c
1,50,000  
   
Z’s Capital A/c
1,50,000 4,50,000
  4,50,000   4,50,000
       

 

Partners’ Capital Accounts
Dr.     Cr.
Date Particulars X Y Z Date Particulars X Y Z
2016         2015        
March 31 P&L App. A/c 1,50,000 1,50,000 1,50,000 April 01 Balance b/d 15,00,000 12,00,000 9,00,000
          2016        
March 31 Z’s Capital A/c 1,50,000 1,50,000   March 31 X’s Capital A/c     1,50,000
March 31 Balance c/d 12,00,000 9,00,000 10,50,000   Y’s Capital A/c     1,50,000
    15,00,000 12,00,000 12,00,000     15,00,000 12,00,000 12,00,000
                   

Note: (i)  Loss of Rs 4,50,000 has been debited to each Partners Capital A/c equally, i.e. Rs 1,50,000 each

(ii) However, Z is guaranteed a minimum profit of Rs1,50,000. Therefore, he needs to be compensated for Rs 1,50,000 loss that has already been debited to his account and Rs 1,50,000 profit that is guaranteed to him.

(iii) The total of Rs 3,00,000 given to Z is to be compensated by X and Y equally and hence both of their accounts have been debited by Rs 1,50,000 each and Z’s Account is to be credited with Rs 3,00,000.

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2015

Dr.   Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to: (WN 1)

 

Profit and Loss A/c (Net Profit)

40,000

A’s Capital A/c

16,000

 

 

 

B’s Capital A/c

14,000

 

 

 

C’s Capital A/c

10,000

40,000

 

 

 

40,000

 

40,000

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.   Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (Net Profit)

60,000

A’s Capital A/c

24,000

 

 

 

B’s Capital A/c

24,000

 

 

 

C’s Capital A/c

12,000

60,000

 

 

 

60,000

 

60,000

 

 

 

 

Working Notes:

WN 1 Distribution of Profit for the year 2015

Profit for 2015 = Rs 40,000

Profit sharing ratio = 2 : 2 : 1

C is given a guarantee of minimum profit of Rs 10,000

Deficiency in C’s Profit Share = 10,000 − 8,000 = Rs 2,000

This deficiency is to be borne by B.

Therefore,

Final Profit Share of A = 16,000

Final Profit Share of B = 16,000 2,000 = Rs 14,000

Final Profit Share of C = 8,000 + 2,000 = Rs 10,000

WN 2 Distribution of Profit for the year 2016

Profit for 2016 = Rs 60,000

Profit sharing ratio = 2 : 2 : 1

C is given a guarantee of minimum profit of Rs 10,000

Page No 2.88:

Question 52:

Profit and Loss Appropriation Account

for the year ended March 31, 2015

Dr.   Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to: (WN 1)

 

Profit and Loss A/c (Net Profit)

40,000

A’s Capital A/c

16,000

 

 

 

B’s Capital A/c

14,000

 

 

 

C’s Capital A/c

10,000

40,000

 

 

 

40,000

 

40,000

 

 

 

 

 

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.   Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (Net Profit)

60,000

A’s Capital A/c

24,000

 

 

 

B’s Capital A/c

24,000

 

 

 

C’s Capital A/c

12,000

60,000

 

 

 

60,000

 

60,000

 

 

 

 

Working Notes:

WN 1 Distribution of Profit for the year 2015

Profit for 2015 = Rs 40,000

Profit sharing ratio = 2 : 2 : 1

C is given a guarantee of minimum profit of Rs 10,000

Deficiency in C’s Profit Share = 10,000 − 8,000 = Rs 2,000

This deficiency is to be borne by B.

Therefore,

Final Profit Share of A = 16,000

Final Profit Share of B = 16,000 2,000 = Rs 14,000

Final Profit Share of C = 8,000 + 2,000 = Rs 10,000

WN 2 Distribution of Profit for the year 2016

Profit for 2016 = Rs 60,000

Profit sharing ratio = 2 : 2 : 1

C is given a guarantee of minimum profit of Rs 10,000

Answer:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 5%:   Profit and Loss A/c (Net Profit) 1,59,000
X
16,000      
Y
10,000      
Z
8,000 34,000    
Profit transferred to: (WN)      
X’s Capital A/c (62,500 – 5,000)
57,500      
Y’s Capital A/c
37,500      
Z’s Capital A/c (25,000 + 5,000)
30,000 1,25,000    
  1,59,000   1,59,000
       

Working Notes: Calculation of Profit
Profit after charging interest on capital = 1,59,000 - 34,000 = Rs 1,25,000
= 1,25,000×510=Rs 62,500= 1,25,000×310=Rs 37,500= 1,25,000×210=Rs 25,000
X guaranteed minimum profit amount of Rs 30,000 to Z. Thus, Rs 5,000 should be added to Z’s Capital Account and to be deducted from X’s Capital Account.

Page No 2.88:

Question 53:

Profit and Loss Appropriation Account
for the year ended 31st March, 2016
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Interest on Capital @ 5%:   Profit and Loss A/c (Net Profit) 1,59,000
X
16,000      
Y
10,000      
Z
8,000 34,000    
Profit transferred to: (WN)      
X’s Capital A/c (62,500 – 5,000)
57,500      
Y’s Capital A/c
37,500      
Z’s Capital A/c (25,000 + 5,000)
30,000 1,25,000    
  1,59,000   1,59,000
       

Working Notes: Calculation of Profit
Profit after charging interest on capital = 1,59,000 - 34,000 = Rs 1,25,000
= 1,25,000×510=Rs 62,500= 1,25,000×310=Rs 37,500= 1,25,000×210=Rs 25,000
X guaranteed minimum profit amount of Rs 30,000 to Z. Thus, Rs 5,000 should be added to Z’s Capital Account and to be deducted from X’s Capital Account.

Answer:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Profit transferred to:   Profit and Loss A/c (Net Profit) 2,22,000
X’s Capital A/c
1,16,550      
Y’s Capital A/c
77,700      
Z’s Capital A/c
27,750 2,22,000    
  2,22,000   2,22,000
       

Working Notes:
Profit for the year= Rs 2,22,000
Z’s share as partner= 2,22,0008= Rs 27,750
Amount payable to Z as an employee:
Salary= 2,000× 12 =Rs 24,000Commission= (2,22,00024,000)×5105=Rs 9,428.5
Total = Rs 33,428.5 (24,000 + 9,428.50)

Thus, nothing will be borne by X and Y as Z will be getting less than what he used to get as an employee.
Profit available for X and Y after giving Z’s share= 2,22,000 – 27,750 = Rs 1,94,250
X’s share= 1,94,250 ×35= Rs 1,16,550Y’s share= 1,94,250 ×25= Rs 77,700

Note : Answer above doesn’t match with the solution given in the book

Page No 2.88:

Question 54:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount Rs Particulars Amount Rs
Profit transferred to:   Profit and Loss A/c (Net Profit) 2,22,000
X’s Capital A/c
1,16,550      
Y’s Capital A/c
77,700      
Z’s Capital A/c
27,750 2,22,000    
  2,22,000   2,22,000
       

Working Notes:
Profit for the year= Rs 2,22,000
Z’s share as partner= 2,22,0008= Rs 27,750
Amount payable to Z as an employee:
Salary= 2,000× 12 =Rs 24,000Commission= (2,22,00024,000)×5105=Rs 9,428.5
Total = Rs 33,428.5 (24,000 + 9,428.50)

Thus, nothing will be borne by X and Y as Z will be getting less than what he used to get as an employee.
Profit available for X and Y after giving Z’s share= 2,22,000 – 27,750 = Rs 1,94,250
X’s share= 1,94,250 ×35= Rs 1,16,550Y’s share= 1,94,250 ×25= Rs 77,700

Note : Answer above doesn’t match with the solution given in the book

Answer:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (Net Profit)

75,000

A’s Capital A/c

41,400

 

B’s Capital A/c

 

B’s Capital A/c

27,600

 

(Deficiency in Revenue)

9,000

C’s Capital A/c

15,000

84,000

 

 

 

84,000

 

84,000

 

 

 

 

Working Notes:

Deficiency in revenue guaranteed by B = 25,000 − 16,000 = Rs 9,000

∴ Profit to be distributed among Partners = 75,000 + B’s deficiency in guaranteed interest

= 75,000 + 9,000 = Rs 84,000

Profit sharing ratio = 3 : 2 : 1

C is given a guarantee of minimum profit of Rs 15,000

Deficiency in C’s Profit Share = 15,000 − 14,000 = Rs 1,000

Therefore, Final Profit Share of A = 42,000 600 = Rs 41,400

Final Profit Share of B = 28,000 400 = Rs 27,600**

Final Profit Share of C =14,000 + 1,000 = Rs 15,000

** In the book, the final profit to B is given as Rs 18,600, however, as per the solution it should be Rs 27,600. The deficiency of Rs 9,000 that was guaranteed by B to the firm would not be deducted from his share as he is bearing it in form of profit.

Page No 2.88:

Question 55:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (Net Profit)

75,000

A’s Capital A/c

41,400

 

B’s Capital A/c

 

B’s Capital A/c

27,600

 

(Deficiency in Revenue)

9,000

C’s Capital A/c

15,000

84,000

 

 

 

84,000

 

84,000

 

 

 

 

Working Notes:

Deficiency in revenue guaranteed by B = 25,000 − 16,000 = Rs 9,000

∴ Profit to be distributed among Partners = 75,000 + B’s deficiency in guaranteed interest

= 75,000 + 9,000 = Rs 84,000

Profit sharing ratio = 3 : 2 : 1

C is given a guarantee of minimum profit of Rs 15,000

Deficiency in C’s Profit Share = 15,000 − 14,000 = Rs 1,000

Therefore, Final Profit Share of A = 42,000 600 = Rs 41,400

Final Profit Share of B = 28,000 400 = Rs 27,600**

Final Profit Share of C =14,000 + 1,000 = Rs 15,000

** In the book, the final profit to B is given as Rs 18,600, however, as per the solution it should be Rs 27,600. The deficiency of Rs 9,000 that was guaranteed by B to the firm would not be deducted from his share as he is bearing it in form of profit.

Answer:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount
Rs
Particulars Amount
Rs
Interest on Capital @ 10%   Profit and Loss A/c (Net Profit) 5,40,000
A’s Capital A/c
18,000      
B’s Capital A/c
15,000      
C’s Capital A/c
9,000      
D’s Capital A/c
6,000 48,000    
C’s Salary 72,000    
Profit transferred to:      
A’s Capital A/c (WN)
1,05,000      
B’s Capital A/c
90,000      
C’s Capital A/c (1,56,000 – 72,000 – 9,000)
75,000      
D’s Capital A/c
1,50,000 4,20,000    
  5,40,000   5,40,000
       

Working Notes:
Profit available for distribution = 5,40,000- 48,000- 72,000 = Rs 4,20,000
D’s share = 4,20,000 × 110=Rs 42,000
Guaranteed= Rs 1,50,000

Deficiency of Rs 1,08,000, i.e. (1,50,000 - 42,000) is to be borne by A, B, C in their profit sharing ratio
C’s share=4,20,000×210=Rs 84,000Less: Guarantee to D(1,08,000 × 29)=Rs 24,000

C’s Share of Profit         = 60,000 (84,000 – 24,000)
Add: Salary                    = 72,000
Add: Interest on Capital = 9,000
Total                              = Rs 1,41,000
Guaranteed by A = Rs 1,56,000

Deficiency to be borne by A = 1,56,000 – 1,41,000 = Rs 15,000
A’s share=4,20,000 × 410 =Rs 1,68,000Less: Guarantee to D (1,08,000 ×49)=Rs 48,000
Less: Guarantee to C = Rs 15,000

A’s share= 1,68,000 – 48,000 – 15,000 = Rs 1,05,000
B’s share=4,20,000 × 310 =Rs 1,26,000Less: Deficiency to D  (1,08,000 × 39) =Rs 36,000
B’s share = 1,26,000 – 36,000 = Rs 90,000

Page No 2.88:

Question 56:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount
Rs
Particulars Amount
Rs
Interest on Capital @ 10%   Profit and Loss A/c (Net Profit) 5,40,000
A’s Capital A/c
18,000      
B’s Capital A/c
15,000      
C’s Capital A/c
9,000      
D’s Capital A/c
6,000 48,000    
C’s Salary 72,000    
Profit transferred to:      
A’s Capital A/c (WN)
1,05,000      
B’s Capital A/c
90,000      
C’s Capital A/c (1,56,000 – 72,000 – 9,000)
75,000      
D’s Capital A/c
1,50,000 4,20,000    
  5,40,000   5,40,000
       

Working Notes:
Profit available for distribution = 5,40,000- 48,000- 72,000 = Rs 4,20,000
D’s share = 4,20,000 × 110=Rs 42,000
Guaranteed= Rs 1,50,000

Deficiency of Rs 1,08,000, i.e. (1,50,000 - 42,000) is to be borne by A, B, C in their profit sharing ratio
C’s share=4,20,000×210=Rs 84,000Less: Guarantee to D(1,08,000 × 29)=Rs 24,000

C’s Share of Profit         = 60,000 (84,000 – 24,000)
Add: Salary                    = 72,000
Add: Interest on Capital = 9,000
Total                              = Rs 1,41,000
Guaranteed by A = Rs 1,56,000

Deficiency to be borne by A = 1,56,000 – 1,41,000 = Rs 15,000
A’s share=4,20,000 × 410 =Rs 1,68,000Less: Guarantee to D (1,08,000 ×49)=Rs 48,000
Less: Guarantee to C = Rs 15,000

A’s share= 1,68,000 – 48,000 – 15,000 = Rs 1,05,000
B’s share=4,20,000 × 310 =Rs 1,26,000Less: Deficiency to D  (1,08,000 × 39) =Rs 36,000
B’s share = 1,26,000 – 36,000 = Rs 90,000

Answer:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Profit and Loss A/c

Dr.

 

40,000

 

 

To Profit and Loss Appropriation A/c

 

 

40,000

 

(Transfer of profit from P&L A/c to P&L Appropriation A/c)

 

 

 

         
  Profit and Loss Appropriation A/c   40,000  
    To A's Capital A/c     19,500
    To B's Capital A/c     15,500
    To C's Capital A/c     5,000

 

(Distribution of final share of profits among the partners)

 

 

 

Working Notes:

Profit for the year = Rs 40,000

Profit sharing ratio = 5 : 4 : 1

C is given a guarantee of minimum profit of Rs 5,000

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

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

Therefore,

Final Profit Share of A = 20,000 500 = Rs 19,500

Final Profit Share of B = 16,000 500 = Rs 15,500

Final Profit Share of C = 4,000 + 1,000 = Rs 5,000

Page No 2.88:

Question 57:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Profit and Loss A/c

Dr.

 

40,000

 

 

To Profit and Loss Appropriation A/c

 

 

40,000

 

(Transfer of profit from P&L A/c to P&L Appropriation A/c)

 

 

 

         
  Profit and Loss Appropriation A/c   40,000  
    To A's Capital A/c     19,500
    To B's Capital A/c     15,500
    To C's Capital A/c     5,000

 

(Distribution of final share of profits among the partners)

 

 

 

Working Notes:

Profit for the year = Rs 40,000

Profit sharing ratio = 5 : 4 : 1

C is given a guarantee of minimum profit of Rs 5,000

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

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

Therefore,

Final Profit Share of A = 20,000 500 = Rs 19,500

Final Profit Share of B = 16,000 500 = Rs 15,500

Final Profit Share of C = 4,000 + 1,000 = Rs 5,000

Answer:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (before C’s salary) (10,710 + 1,800)

12,510

A’s Capital A/c

6,183

 

 

 

B’s Capital A/c

3,825

 

 

 

C’s Capital A/c

2,502

12,510

 

 

 

12,510

 

12,510

 

 

 

 

Working Notes:

WN 1 Salary to C = Rs 150 × 12 = Rs 1,800

WN 2

Total Amount for C (Salary and Commission) = 1,800 + 510 = Rs 2,310

WN 3 Profit before C’s Salary = 10,710 + 1,800 = Rs 12,510

WN 4 Excess of 1/5th share over Salary and Commission = 2,502 − 2,310 = Rs 192

Profit available for distribution between A and B = 12,510 − 1,800 − 510 = Rs 10,200

WN 5 A’s share of Profit after C’s deficiency = 6,375 − 192 = Rs 6,183



Page No 2.89:

Question 58:

Profit and Loss Appropriation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to:

 

Profit and Loss A/c (before C’s salary) (10,710 + 1,800)

12,510

A’s Capital A/c

6,183

 

 

 

B’s Capital A/c

3,825

 

 

 

C’s Capital A/c

2,502

12,510

 

 

 

12,510

 

12,510

 

 

 

 

Working Notes:

WN 1 Salary to C = Rs 150 × 12 = Rs 1,800

WN 2

Total Amount for C (Salary and Commission) = 1,800 + 510 = Rs 2,310

WN 3 Profit before C’s Salary = 10,710 + 1,800 = Rs 12,510

WN 4 Excess of 1/5th share over Salary and Commission = 2,502 − 2,310 = Rs 192

Profit available for distribution between A and B = 12,510 − 1,800 − 510 = Rs 10,200

WN 5 A’s share of Profit after C’s deficiency = 6,375 − 192 = Rs 6,183

Answer:

Profit and Loss Appropriation Account

for the year ended March 31 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

 

Profit and Loss A/c

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’s Capital A/c

49,250

 

 

 

Y’s Capital A/c

38,250

 

 

 

Z’s Capital A/c

40,000

1,27,500

 

 

 

1,60,000

 

1,60,000

 

 

 

 

Working Notes:

Calculation of Interest on Capital

X's=3,00,000×10100×612=Rs 15,000Y's=2,00,000×10100×612=Rs 10,000Z's=1,50,000×10100×612=Rs 7,500

Calculation of Profit share of each partner

Profit after charging interest on capital = 1,60,000 – 32,500 = Rs 1,27,500

X's share=1,27,500×410=Rs 51,000Y's share=1,27,500×310=Rs 38,250Z's share=1,27,500×310=Rs 38,250

Z has been guaranteed Rs 80,000 profit for full year by X. The partnership firm was formed on October 01, 2015, this means for half year, the guaranteed profit should be Rs 40,000 only.

Deficiency = 40,000 (Guaranteed Profit) – 38,250 (Actual Profit)
                  = Rs 1,750 (to be borne by X)

Calculation of Final Profit share of each partner

X's share=51,000-1,750=Rs 49,250Y's share=Rs 38,250Z's share=38,250+1,750=Rs 40,000

Page No 2.89:

Question 59:

Profit and Loss Appropriation Account

for the year ended March 31 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

 

Profit and Loss A/c

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’s Capital A/c

49,250

 

 

 

Y’s Capital A/c

38,250

 

 

 

Z’s Capital A/c

40,000

1,27,500

 

 

 

1,60,000

 

1,60,000

 

 

 

 

Working Notes:

Calculation of Interest on Capital

X's=3,00,000×10100×612=Rs 15,000Y's=2,00,000×10100×612=Rs 10,000Z's=1,50,000×10100×612=Rs 7,500

Calculation of Profit share of each partner

Profit after charging interest on capital = 1,60,000 – 32,500 = Rs 1,27,500

X's share=1,27,500×410=Rs 51,000Y's share=1,27,500×310=Rs 38,250Z's share=1,27,500×310=Rs 38,250

Z has been guaranteed Rs 80,000 profit for full year by X. The partnership firm was formed on October 01, 2015, this means for half year, the guaranteed profit should be Rs 40,000 only.

Deficiency = 40,000 (Guaranteed Profit) – 38,250 (Actual Profit)
                  = Rs 1,750 (to be borne by X)

Calculation of Final Profit share of each partner

X's share=51,000-1,750=Rs 49,250Y's share=Rs 38,250Z's share=38,250+1,750=Rs 40,000

Answer:

Profit and Loss Appropriation Account
for the year ended March 31, 2016
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Salary to Z 2,000 × 12 24,000 Profit and Loss A/c (Net Profit) 75,000
Interest on Capital:   Z’s Capital A/c 5,000
X
10,000   Interest on Drawings  
Y
7,500  
X
500  
Z
5,000 22,500
Y
400  
Profit trsfd. to Partner’s Capital A/c  
Z
300 1,200
X
17,350      
Y
11,567      
Z
5,783 34,700    
  81,200   81,200
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2016         2015        
March 31 Drawings 10,000 8,000 6,000 April 01 Balance b/d 1,00,000 75,000 50,000
March 31 Interest on Drawings 500 400 300 2016        
March 31 Profit & Loss App. A/c     5,000 March 31 Interest on Capital 10,000 7,500 5,000
March 31 Balance c/d 1,16,850 85,667 73,483 March 31 Salary     24,000
          March 31 Profit & Loss App. A/c 17,350 11,567 5,783
    1,27,350 94,067 84,783     1,27,350 94,067 84,783
                   

Note: Interest on drawings is calculated for an average period of six months because date of drawings is not given.

Page No 2.89:

Question 60:

Profit and Loss Appropriation Account
for the year ended March 31, 2016
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Salary to Z 2,000 × 12 24,000 Profit and Loss A/c (Net Profit) 75,000
Interest on Capital:   Z’s Capital A/c 5,000
X
10,000   Interest on Drawings  
Y
7,500  
X
500  
Z
5,000 22,500
Y
400  
Profit trsfd. to Partner’s Capital A/c  
Z
300 1,200
X
17,350      
Y
11,567      
Z
5,783 34,700    
  81,200   81,200
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2016         2015        
March 31 Drawings 10,000 8,000 6,000 April 01 Balance b/d 1,00,000 75,000 50,000
March 31 Interest on Drawings 500 400 300 2016        
March 31 Profit & Loss App. A/c     5,000 March 31 Interest on Capital 10,000 7,500 5,000
March 31 Balance c/d 1,16,850 85,667 73,483 March 31 Salary     24,000
          March 31 Profit & Loss App. A/c 17,350 11,567 5,783
    1,27,350 94,067 84,783     1,27,350 94,067 84,783
                   

Note: Interest on drawings is calculated for an average period of six months because date of drawings is not given.

Answer:

Profit and Loss Appropriation Account
for the year ended March 31,2016
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Profit & Loss A/c (Net Loss) 60,000 Loss trsfd. to Partner’s Capital A/c  
   
Cook
30,000  
   
Broad
20,000  
   
Prior 
10,000 60,000
       
  60,000   60,000
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars Cook Broad Prior Date Particulars Cook Broad Prior
2016         2015        
March 31 Profit & Loss App. A/c 30,000 20,000 10,000 April 01 Balance b/d 6,00,000 4,00,000 2,00,000
March 31 Prior’s Cap. A/c 66,000 44,000 - 2016        
March 31 Balance c/d 5,04,000 3,36,000 3,00,000 March 31 Cook’s Cap. A/c     66,000
          March 31 Broad’s Cap. A/c     44,000
    6,00,000 4,00,000 3,10,000     6,00,000 4,00,000 3,10,000
                   

Page No 2.89:

Question 61:

Profit and Loss Appropriation Account
for the year ended March 31,2016
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
Profit & Loss A/c (Net Loss) 60,000 Loss trsfd. to Partner’s Capital A/c  
   
Cook
30,000  
   
Broad
20,000  
   
Prior 
10,000 60,000
       
  60,000   60,000
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars Cook Broad Prior Date Particulars Cook Broad Prior
2016         2015        
March 31 Profit & Loss App. A/c 30,000 20,000 10,000 April 01 Balance b/d 6,00,000 4,00,000 2,00,000
March 31 Prior’s Cap. A/c 66,000 44,000 - 2016        
March 31 Balance c/d 5,04,000 3,36,000 3,00,000 March 31 Cook’s Cap. A/c     66,000
          March 31 Broad’s Cap. A/c     44,000
    6,00,000 4,00,000 3,10,000     6,00,000 4,00,000 3,10,000
                   

Answer:

Profit and Loss Appropriation Account
for the year ended March 31,2016
Dr.   Cr.
Particulars  Amount (Rs) Particulars Amount (Rs)
Profit & Loss A/c (Net Loss) 2,00,000 Loss trsfd. to Partner’s Capital A/c  
   
Dhoni
80,000  
   
Kohli
80,000  
   
Ishant
40,000 2,00,000
       
  2,00,000   2,00,000
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars Dhoni Kohli Ishant Date Particulars Dhoni Kohli Ishant
2016         2015        
March 31 Profit & Loss App. A/c 80,000 80,000 40,000 April 01 Balance b/d 15,00,000 14,00,000 5,00,000
March 31 Ishant’s Cap. A/c 4,32,000 1,08,000   2016        
March 31 Balance c/d 9,88,000 12,12,000 10,00,000 March 31 Dhoni’s Cap. A/c     4,32,000
          March 31 Kohli’s Cap. A/c     1,08,000
                   
    15,00,000 14,00,000 10,40,000     15,00,000 14,00,000 10,40,000
                   

Page No 2.89:

Question 62:

Profit and Loss Appropriation Account
for the year ended March 31,2016
Dr.   Cr.
Particulars  Amount (Rs) Particulars Amount (Rs)
Profit & Loss A/c (Net Loss) 2,00,000 Loss trsfd. to Partner’s Capital A/c  
   
Dhoni
80,000  
   
Kohli
80,000  
   
Ishant
40,000 2,00,000
       
  2,00,000   2,00,000
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars Dhoni Kohli Ishant Date Particulars Dhoni Kohli Ishant
2016         2015        
March 31 Profit & Loss App. A/c 80,000 80,000 40,000 April 01 Balance b/d 15,00,000 14,00,000 5,00,000
March 31 Ishant’s Cap. A/c 4,32,000 1,08,000   2016        
March 31 Balance c/d 9,88,000 12,12,000 10,00,000 March 31 Dhoni’s Cap. A/c     4,32,000
          March 31 Kohli’s Cap. A/c     1,08,000
                   
    15,00,000 14,00,000 10,40,000     15,00,000 14,00,000 10,40,000
                   

Answer:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

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

 

 

 

 

 

Page No 2.89:

Question 63:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

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

 

 

 

 

 

Answer:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
A’s Capital A/c Dr.   48,000  
B’s Capital A/c Dr.   24,000  
To C’s Capital A/c
    72,000
(Adjustment entry passed)      
       
B’s Capital A/c Dr.   24,000  
To B’s Loan A/c
    24,000
(Loan given by B from his Capital balance)      
       


 

Statement Showing Adjustment
Particulars A B C Total
Interest on B’s Loan @ 6%   24,000   24,000
Profit to be distributed equally (6,00,000 – 24,000) 1,92,000 1,92,000 1,92,000 5,76,000
Amount to be distributed 1,92,000 2,16,000 1,92,000 6,00,000
Less: Profits wrongly distributed
2,40,000 2,40,000 1,20,000 6,00,000
Net Effect (48,000)(Dr.) (24,000)(Dr.) 72,000 (Cr.) NIL

Note: B's Capital A/c in the first entry should be debited with 'Rs 24,000' and not 'Rs 48,000' as per the book.

Page No 2.89:

Question 64:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
A’s Capital A/c Dr.   48,000  
B’s Capital A/c Dr.   24,000  
To C’s Capital A/c
    72,000
(Adjustment entry passed)      
       
B’s Capital A/c Dr.   24,000  
To B’s Loan A/c
    24,000
(Loan given by B from his Capital balance)      
       


 

Statement Showing Adjustment
Particulars A B C Total
Interest on B’s Loan @ 6%   24,000   24,000
Profit to be distributed equally (6,00,000 – 24,000) 1,92,000 1,92,000 1,92,000 5,76,000
Amount to be distributed 1,92,000 2,16,000 1,92,000 6,00,000
Less: Profits wrongly distributed
2,40,000 2,40,000 1,20,000 6,00,000
Net Effect (48,000)(Dr.) (24,000)(Dr.) 72,000 (Cr.) NIL

Note: B's Capital A/c in the first entry should be debited with 'Rs 24,000' and not 'Rs 48,000' as per the book.

Answer:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
Y’s Current A/c Dr.   1,200  
To X’s Current A/c
      500
To Z’s Current A/c
    700
(Interest on capital omitted, now provided)      
       

 

Statement Showing Adjustment
Particulars X Y Z Total
Interest on Capital to be provided @ 10%:        
2011-12 2,000 1,600 1,400 5,000
2012-13 2,000 1,600 1,400 5,000
2013-14 2,000 1,600 1,400 5,000
Total 6,000 4,800 4,200 15,000
Less: Profits wrongly distributed        
2011-12 1,000 2,000 2,000 5,000
2012-13 2,500 1,500 1,000 5,000
2013-14 2,000 2,500 500 5,000
Total 5,500 6,000 3,500 15,000
Net Effect 500 (Cr.) (1,200) (Dr.) 700 (Cr.) NIL

Page No 2.89:

Question 65:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
Y’s Current A/c Dr.   1,200  
To X’s Current A/c
      500
To Z’s Current A/c
    700
(Interest on capital omitted, now provided)      
       

 

Statement Showing Adjustment
Particulars X Y Z Total
Interest on Capital to be provided @ 10%:        
2011-12 2,000 1,600 1,400 5,000
2012-13 2,000 1,600 1,400 5,000
2013-14 2,000 1,600 1,400 5,000
Total 6,000 4,800 4,200 15,000
Less: Profits wrongly distributed        
2011-12 1,000 2,000 2,000 5,000
2012-13 2,500 1,500 1,000 5,000
2013-14 2,000 2,500 500 5,000
Total 5,500 6,000 3,500 15,000
Net Effect 500 (Cr.) (1,200) (Dr.) 700 (Cr.) NIL

Answer:

Journal

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

Anil’s Capital A/c

Dr.

 

550

 

To Mohan’s Capital A/c

 

 

550

(Interest on capital and interest on drawings was omitted, now adjusted)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Capital at the beginning

Particulars

Mohan

Vijay

Anil

Total

Capital at the end

30,000

25,000

20,000

75,000

Add: Drawings

5,000

4,000

3,000

12,000

Less: Profit (1:1:1)

(8,000)

(8,000)

(8,000)

(24,000)

Capital in the beginning

27,000

21,000

15,000

63,000

 

 

 

 

 

WN 2 Calculation of Interest on Capital

WN 3

Statement Showing Adjustment

 

Mohan

Vijay

Anil

Total

Interest on Capital to be credited

2,700

2,100

1,500

6,300

Less: Interest on Drawings

(250)

(200)

(150)

(600)

Right Distribution of Rs 5,700

2,450

1,900

1,350

5,700

Wrong Distribution of Rs 5,700 (1:1:1)

(1,900)

(1,900)

(1,900)

(5,700)

Net Effect

550

Nil

(550)

NIL

 

 

 

 

 

WN 4 Calculation of Final Profit Share of Partners

Total Corrected Profit Available for Distribution = Profit - Interest on Capital + Interest on Drawings = 24,000 - 6,300 + 600 = Rs 18,300



Page No 2.90:

Question 66:

Journal

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

Anil’s Capital A/c

Dr.

 

550

 

To Mohan’s Capital A/c

 

 

550

(Interest on capital and interest on drawings was omitted, now adjusted)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Capital at the beginning

Particulars

Mohan

Vijay

Anil

Total

Capital at the end

30,000

25,000

20,000

75,000

Add: Drawings

5,000

4,000

3,000

12,000

Less: Profit (1:1:1)

(8,000)

(8,000)

(8,000)

(24,000)

Capital in the beginning

27,000

21,000

15,000

63,000

 

 

 

 

 

WN 2 Calculation of Interest on Capital

WN 3

Statement Showing Adjustment

 

Mohan

Vijay

Anil

Total

Interest on Capital to be credited

2,700

2,100

1,500

6,300

Less: Interest on Drawings

(250)

(200)

(150)

(600)

Right Distribution of Rs 5,700

2,450

1,900

1,350

5,700

Wrong Distribution of Rs 5,700 (1:1:1)

(1,900)

(1,900)

(1,900)

(5,700)

Net Effect

550

Nil

(550)

NIL

 

 

 

 

 

WN 4 Calculation of Final Profit Share of Partners

Total Corrected Profit Available for Distribution = Profit - Interest on Capital + Interest on Drawings = 24,000 - 6,300 + 600 = Rs 18,300

Answer:

Journal

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

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

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

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 Rs 2,700 (1:1:1)

900

900

900

(2,700)

Net Effect

(300)

NIL

300

NIL

 

 

 

 

 

 

Page No 2.90:

Question 67:

Journal

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

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

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

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 Rs 2,700 (1:1:1)

900

900

900

(2,700)

Net Effect

(300)

NIL

300

NIL

 

 

 

 

 

 

Answer:

Journal
Particulars L.F. Debit
Amount

Rs
Credit Amount
Rs
Z’s Current A/c Dr.   480  
To X’s Current A/c
      320
To Y’s Current A/c
    160
(Profit previously omitted has been distributed correctly)      
       
 
Statement Showing Adjustment
Particulars X Y Z Total
Profit to be distributed: (Cr.)        
2013-14 (4,800 in 5:3:2) 2,400 1,440 960 4,800
2014-15 (4,800 in 2:2:1) 1,920 1,920 960 4,800
Total 4,320 3,360 1,920 9,600
Less: Interest on Capital wrongly provided @ 5%        
2013-14 2,000 1,600 1,200 4,800
2014-15 2,000 1,600 1,200 4,800
Total 4,000 3,200 2,400 9,600
Net effect 320 (Cr.) 160 (Cr.) (480) (Dr.) NIL

Page No 2.90:

Question 68:

Journal
Particulars L.F. Debit
Amount

Rs
Credit Amount
Rs
Z’s Current A/c Dr.   480  
To X’s Current A/c
      320
To Y’s Current A/c
    160
(Profit previously omitted has been distributed correctly)      
       
 
Statement Showing Adjustment
Particulars X Y Z Total
Profit to be distributed: (Cr.)        
2013-14 (4,800 in 5:3:2) 2,400 1,440 960 4,800
2014-15 (4,800 in 2:2:1) 1,920 1,920 960 4,800
Total 4,320 3,360 1,920 9,600
Less: Interest on Capital wrongly provided @ 5%        
2013-14 2,000 1,600 1,200 4,800
2014-15 2,000 1,600 1,200 4,800
Total 4,000 3,200 2,400 9,600
Net effect 320 (Cr.) 160 (Cr.) (480) (Dr.) NIL

Answer:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

A’s Capital A/c

Dr.

 

1,500

 

B’s Capital A/c

Dr.

 

8,250

 

To C’s Capital A/c

 

 

9,750

(Adjustment of profit made)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Profit available for Distribution

Profit available for distribution = Net Profit − Interest on Capital − Salary to C

                                           = 45,000 − 5,000 − 18,000 = Rs 22,000

WN 3 Right Distribution of Rs 45,000

Particulars

A

B

C

Total

Interest on Capital to be credited

2,500

1,250

1,250

5,000

Salary to be credited

 

 

18,000

18,000

Distribution of Profit Rs 22,000

11,000

5,500

5,500

22,000

Total Profit

13,500

6,750

24,750

45,000

 

 

 

 

 

WN 4 Wrong Distribution of Rs 45,000 in equal Ratio

WN 5

Statement Showing Adjustment

Particulars

A

B

C

Total

Right Distribution of Profit (WN 3)

13,500

6,750

24,750

45,000

Wrong Distribution of Profit (WN 4)

(15,000)

(15,000)

(15,000)

(45,000)

Net Effect

(1,500)

(8,250)

9,750

NIL

 

 

 

 

 

 

Page No 2.90:

Question 69:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

A’s Capital A/c

Dr.

 

1,500

 

B’s Capital A/c

Dr.

 

8,250

 

To C’s Capital A/c

 

 

9,750

(Adjustment of profit made)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculation of Profit available for Distribution

Profit available for distribution = Net Profit − Interest on Capital − Salary to C

                                           = 45,000 − 5,000 − 18,000 = Rs 22,000

WN 3 Right Distribution of Rs 45,000

Particulars

A

B

C

Total

Interest on Capital to be credited

2,500

1,250

1,250

5,000

Salary to be credited

 

 

18,000

18,000

Distribution of Profit Rs 22,000

11,000

5,500

5,500

22,000

Total Profit

13,500

6,750

24,750

45,000

 

 

 

 

 

WN 4 Wrong Distribution of Rs 45,000 in equal Ratio

WN 5

Statement Showing Adjustment

Particulars

A

B

C

Total

Right Distribution of Profit (WN 3)

13,500

6,750

24,750

45,000

Wrong Distribution of Profit (WN 4)

(15,000)

(15,000)

(15,000)

(45,000)

Net Effect

(1,500)

(8,250)

9,750

NIL

 

 

 

 

 

 

Answer:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
X’s Current A/c Dr.   18,375  
To Y’s Current A/c
    4,650
To Z’s Current A/c
    13,725
(Adjustment entry passed)      
       

 

Statement Showing Adjustment
Particulars X Y Z Total
Interest on Capital @ 5% 7,500 5,000 2,500 15,000
Salary to Y   30,000   30,000
Commission to Z (WN)     6,750 6,750
Profits to be distributed in 5 : 2 : 3 49,125 19,650 29,475 98,250
Total 56,625 54,650 38,725 1,50,000
Less: Profits wrongly distributed 75,000 50,000 25,000 1,50,000
Net effect (18,375) (Dr.) 4,650 (Cr.) 13,725 (Cr.) NIL

Working Notes: Calculation of Commission
Profit after charging interest on capital = 1,50,000 – 15,000 = Rs 1,35,000
Commission to Z = 1,35,000 × 5100 = Rs 6,750

Page No 2.90:

Question 70:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
X’s Current A/c Dr.   18,375  
To Y’s Current A/c
    4,650
To Z’s Current A/c
    13,725
(Adjustment entry passed)      
       

 

Statement Showing Adjustment
Particulars X Y Z Total
Interest on Capital @ 5% 7,500 5,000 2,500 15,000
Salary to Y   30,000   30,000
Commission to Z (WN)     6,750 6,750
Profits to be distributed in 5 : 2 : 3 49,125 19,650 29,475 98,250
Total 56,625 54,650 38,725 1,50,000
Less: Profits wrongly distributed 75,000 50,000 25,000 1,50,000
Net effect (18,375) (Dr.) 4,650 (Cr.) 13,725 (Cr.) NIL

Working Notes: Calculation of Commission
Profit after charging interest on capital = 1,50,000 – 15,000 = Rs 1,35,000
Commission to Z = 1,35,000 × 5100 = Rs 6,750

Answer:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Ram’s Capital A/c

Dr.

 

100

 

 

To Mohan’s Capital A/c

 

 

100

 

(Interest on Capital was omitted, now adjusted)

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Particulars

Ram

Mohan

Total

Interest on Capital to be credited

200

400

600

For sharing above Loss (1:1)

(300)

(300)

(600)

Net Effect

(100)

(100)

Nil

(Dr.)

(Cr.)

 

 

 

Page No 2.90:

Question 71:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Ram’s Capital A/c

Dr.

 

100

 

 

To Mohan’s Capital A/c

 

 

100

 

(Interest on Capital was omitted, now adjusted)

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

Particulars

Ram

Mohan

Total

Interest on Capital to be credited

200

400

600

For sharing above Loss (1:1)

(300)

(300)

(600)

Net Effect

(100)

(100)

Nil

(Dr.)

(Cr.)

 

 

 

Answer:

Journal

Date

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

 

Q’s Capital A/c

Dr.

 

4,000

 

 

R’s Capital A/c

Dr.

 

1,000

 

 

To P’s Capital A/c

 

 

5,000

 

(Interest on Capital was omitted, now adjusted)

 

 

 

 

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

P

Q

R

Particulars

P

Q

R

P’s Capital

 

4,000

1,000

Balance b/d

1,50,000

1,80,000

2,10,000

 

 

 

 

Q’s Capital

4,000

 

 

Balance c/d

1,55,000

1,76,000

2,09,000

R’s Capital

1,000

 

 

 

1,55,000

1,80,000

2,10,000

 

1,55,000

1,80,000

2,10,000

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Capital as on April 01, 2015 (Opening Capital)

Particulars

P

Q

R

Total

Capital as on March 31, 2016 (Closing)

1,50,000

1,80,000

2,10,000

5,40,000

Add: Drawings

20,000

20,000

20,000

60,000

Less: Profit (1 : 2 : 2)

(12,000)

(24,000)

(24,000)

(60,000)

Capital as April 01, 2015 (Opening)

1,58,000

1,76,000

2,06,000

5,40,000

 

 

 

 

 

WN 2 Calculation of Interest on Capital

WN 4

Statement Showing Adjustment

Particulars

P

Q

R

Total

Interest on Capital to be credited

15,800

17,600

20,600

54,000

For sharing above Loss (1 : 2 : 2)

(10,800)

(21,600)

(21,600)

(54,000)

Net Effect

5,000

(Cr.)

(4,000)

(Dr.)

(1,000)

(Dr.)

(NIL)

 

 

 

 

 

 

Page No 2.90:

Question 72:

Journal

Date

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

 

Q’s Capital A/c

Dr.

 

4,000

 

 

R’s Capital A/c

Dr.

 

1,000

 

 

To P’s Capital A/c

 

 

5,000

 

(Interest on Capital was omitted, now adjusted)

 

 

 

 

 

 

 

 

 

Partners’ Capital Accounts

Dr.

Cr.

Particulars

P

Q

R

Particulars

P

Q

R

P’s Capital

 

4,000

1,000

Balance b/d

1,50,000

1,80,000

2,10,000

 

 

 

 

Q’s Capital

4,000

 

 

Balance c/d

1,55,000

1,76,000

2,09,000

R’s Capital

1,000

 

 

 

1,55,000

1,80,000

2,10,000

 

1,55,000

1,80,000

2,10,000

 

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Capital as on April 01, 2015 (Opening Capital)

Particulars

P

Q

R

Total

Capital as on March 31, 2016 (Closing)

1,50,000

1,80,000

2,10,000

5,40,000

Add: Drawings

20,000

20,000

20,000

60,000

Less: Profit (1 : 2 : 2)

(12,000)

(24,000)

(24,000)

(60,000)

Capital as April 01, 2015 (Opening)

1,58,000

1,76,000

2,06,000

5,40,000

 

 

 

 

 

WN 2 Calculation of Interest on Capital

WN 4

Statement Showing Adjustment

Particulars

P

Q

R

Total

Interest on Capital to be credited

15,800

17,600

20,600

54,000

For sharing above Loss (1 : 2 : 2)

(10,800)

(21,600)

(21,600)

(54,000)

Net Effect

5,000

(Cr.)

(4,000)

(Dr.)

(1,000)

(Dr.)

(NIL)

 

 

 

 

 

 

Answer:

Journal

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

Sohan’s Capital A/c

Dr.

 

300

 

To Ram’s Capital A/c

 

 

300

(Interest on Capital was wrongly credited,

now adjusted)

 

 

 

 

 

 

 

Working Notes:

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

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

WN 3

Statement Showing Adjustment

Particulars

Ram

Mohan

Sohan

Total

Interest on Capital wrongly credited at 5% p.a. reversed

(6,000)

(4,500)

(3,000)

(13,500)

Interest on Capital credited at 6% p.a.

7,200

5,400

3,600

16,200

Right Distribution

1,200

900

600

2,700

Wrong Distribution of Rs 2,700
(1 : 1 : 1)

(900)

(900)

(900)

(2,700)

Net Effect

300

NIL

(300)

NIL

 

 

 

 

 

 

Page No 2.90:

Question 73:

Journal

Particulars

L. F.

Debit Amount

Rs

Credit Amount

Rs

Sohan’s Capital A/c

Dr.

 

300

 

To Ram’s Capital A/c

 

 

300

(Interest on Capital was wrongly credited,

now adjusted)

 

 

 

 

 

 

 

Working Notes:

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

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

WN 3

Statement Showing Adjustment

Particulars

Ram

Mohan

Sohan

Total

Interest on Capital wrongly credited at 5% p.a. reversed

(6,000)

(4,500)

(3,000)

(13,500)

Interest on Capital credited at 6% p.a.

7,200

5,400

3,600

16,200

Right Distribution

1,200

900

600

2,700

Wrong Distribution of Rs 2,700
(1 : 1 : 1)

(900)

(900)

(900)

(2,700)

Net Effect

300

NIL

(300)

NIL

 

 

 

 

 

 

Answer:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

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.

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

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 Rs 6,000 (2 : 1 : 2)

(2,400)

(1,200)

(2,400)

(6,000)

Net Effect

600

(200)

(400)

NIL

 

 

 

 

 

 



Page No 2.91:

Question 74:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

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.

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

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 Rs 6,000 (2 : 1 : 2)

(2,400)

(1,200)

(2,400)

(6,000)

Net Effect

600

(200)

(400)

NIL

 

 

 

 

 

 

Answer:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

Shiv’s Current A/c

Dr.

 

6,636

 

To Shanker’s Current A/c

 

 

6,636

(Interest on Capital and Interest on drawings was

omitted, now adjusted)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculating of Interest on Drawings

WN 3

Statement Showing Adjustment

Particulars

Shiv

Shanker

Total

Interest on Capital (to be credited)

20,400

25,200

45,600

Interest Drawings (to be debited)

(1,620)

(1,620)

(3,240)

Right Distribution

18,780

23,580

42,360

Wrong Distribution (3 : 2)

(25,416)

(16,944)

(42,360)

Net Effect

 (6,636)

6,636

NIL

 

 

 

 

 

Page No 2.91:

Question 75:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

Shiv’s Current A/c

Dr.

 

6,636

 

To Shanker’s Current A/c

 

 

6,636

(Interest on Capital and Interest on drawings was

omitted, now adjusted)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Calculating of Interest on Drawings

WN 3

Statement Showing Adjustment

Particulars

Shiv

Shanker

Total

Interest on Capital (to be credited)

20,400

25,200

45,600

Interest Drawings (to be debited)

(1,620)

(1,620)

(3,240)

Right Distribution

18,780

23,580

42,360

Wrong Distribution (3 : 2)

(25,416)

(16,944)

(42,360)

Net Effect

 (6,636)

6,636

NIL

 

 

 

 

 

Answer:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

A’s Current A/c

Dr.

 

3,675

 

To B’s Current A/c

 

 

2,895

To C’s Current A/c

 

 

780

(Adjustment of profit made)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Salary to B = Rs 500 × 12 = Rs 6,000

WN 3 Calculation of Commission to C

Commission to C = 5% on profit after interest on capital but before salary

Profit after Interest on Capital but before Salary = 30,000 3,000 = Rs 27,000

WN 4 Calculation of Profit Share of each Partner

Profit available for Distribution = 30,000 − 3,000 − 6,000 − 1,350 = Rs 19,650

WN 5

Statement Showing Adjustment

Particulars

A

B

C

Total

Interest on Capital (to be credited)

1,500

1,000

   500

3,000

Salary/ Commission (to be credited)

-

6,000

1,350

7,350

Profit (to be credited)

9,825

5,895

3,930

19,650

Right Distribution

11,325

12,895

5,780

30,000

Wrong Distribution of Rs 30,000 (3 : 2 : 1)

(15,000)

(10,000)

(5,000)

(30,000)

Net Effect

(3,675)

2,895

  780

NIL

 

 

 

 

 

 

Page No 2.91:

Question 76:

Journal

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

A’s Current A/c

Dr.

 

3,675

 

To B’s Current A/c

 

 

2,895

To C’s Current A/c

 

 

780

(Adjustment of profit made)

 

 

 

 

 

 

 

Working Notes:

WN 1 Calculation of Interest on Capital

WN 2 Salary to B = Rs 500 × 12 = Rs 6,000

WN 3 Calculation of Commission to C

Commission to C = 5% on profit after interest on capital but before salary

Profit after Interest on Capital but before Salary = 30,000 3,000 = Rs 27,000

WN 4 Calculation of Profit Share of each Partner

Profit available for Distribution = 30,000 − 3,000 − 6,000 − 1,350 = Rs 19,650

WN 5

Statement Showing Adjustment

Particulars

A

B

C

Total

Interest on Capital (to be credited)

1,500

1,000

   500

3,000

Salary/ Commission (to be credited)

-

6,000

1,350

7,350

Profit (to be credited)

9,825

5,895

3,930

19,650

Right Distribution

11,325

12,895

5,780

30,000

Wrong Distribution of Rs 30,000 (3 : 2 : 1)

(15,000)

(10,000)

(5,000)

(30,000)

Net Effect

(3,675)

2,895

  780

NIL

 

 

 

 

 

 

Answer:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
Sam’s Capital A/c Dr.   9,275  
To Alex’s Capital A/c
    1,275
To John’s Capital A/c
    8,000
(Adjustment entry passed)      
       

 

Statement Showing Adjustment
Particulars Alex John Sam Total
Interest on Capital @ 10% 10,000 8,000 6,000 24,000
Salary to John   12,000   12,000
Interest on Drawings @ 4% (100) (100) (100) (300)
Profits to be distributed in 5 : 4 : 3 16,375 13,100 9,825 39,300
Total 26,275 33,000 15,725 75,000
Less: Profits wrongly distributed equally 25,000 25,000 25,000 75,000
Net effect 1,275 (Cr.) 8,000 (Cr.) (9,275) (Dr.) NIL

Page No 2.91:

Question 77:

Journal
Particulars L.F. Debit
Amount

Rs
Credit
Amount

Rs
Sam’s Capital A/c Dr.   9,275  
To Alex’s Capital A/c
    1,275
To John’s Capital A/c
    8,000
(Adjustment entry passed)      
       

 

Statement Showing Adjustment
Particulars Alex John Sam Total
Interest on Capital @ 10% 10,000 8,000 6,000 24,000
Salary to John   12,000   12,000
Interest on Drawings @ 4% (100) (100) (100) (300)
Profits to be distributed in 5 : 4 : 3 16,375 13,100 9,825 39,300
Total 26,275 33,000 15,725 75,000
Less: Profits wrongly distributed equally 25,000 25,000 25,000 75,000
Net effect 1,275 (Cr.) 8,000 (Cr.) (9,275) (Dr.) NIL

Answer:

Adjusting Entry

Journal

Date

Particulars

L.F.

Debit

Amount

Credit

Amount

 

A’s Capital A/c

Dr.

 

8,500

 

 

   To B’s Capital A/c

 

 

4,500

 

   To C’s Capital A/c

 

 

4,000

 

(Adjustment entry is made)

 

 

 

           

 

Particulars

A

B

C

Total

Salary to A & B                                           (Cr.)

1,500

1,500

-

(3,000)

Commission to B                                         (Cr.)

-

4,500

-

(4,500)

Profit guaranteed to be shared (WN1)         (Cr.)

35,000

28,500

19,000

(82,500)

 

36,500

34,500

19,000

(90,000)

Profits wrongly distributed among the partners (Dr.)

(45,000)

(30,000)

(15,000)

90,000

Net Effect

8,500(Dr.)

4,500 (Cr.)

4,000 (Cr.)

Nil

 

 

 

 

 

Working Notes:

 

WN1: Profit remained to be distributed among the partners

Guaranteed amount of profit to A by B and C = Rs 35,000

Deficiency = 35,000 – 30,938 = Rs 4,062

It is to be borne by B and C in their profit sharing ratio i.e. 3:2

Thus,

A’s share of profit = 30,938 + 4,062 = Rs 35,000
B’s share of profit = 30,937–
2,437 = Rs 28,500
C’s share of profit = 20,625–
1,625 = Rs 19,000



Page No 2.92:

Question 78:

Adjusting Entry

Journal

Date

Particulars

L.F.

Debit

Amount

Credit

Amount

 

A’s Capital A/c

Dr.

 

8,500

 

 

   To B’s Capital A/c

 

 

4,500

 

   To C’s Capital A/c

 

 

4,000

 

(Adjustment entry is made)

 

 

 

           

 

Particulars

A

B

C

Total

Salary to A & B                                           (Cr.)

1,500

1,500

-

(3,000)

Commission to B                                         (Cr.)

-

4,500

-

(4,500)

Profit guaranteed to be shared (WN1)         (Cr.)

35,000

28,500

19,000

(82,500)

 

36,500

34,500

19,000

(90,000)

Profits wrongly distributed among the partners (Dr.)

(45,000)

(30,000)

(15,000)

90,000

Net Effect

8,500(Dr.)

4,500 (Cr.)

4,000 (Cr.)

Nil

 

 

 

 

 

Working Notes:

 

WN1: Profit remained to be distributed among the partners

Guaranteed amount of profit to A by B and C = Rs 35,000

Deficiency = 35,000 – 30,938 = Rs 4,062

It is to be borne by B and C in their profit sharing ratio i.e. 3:2

Thus,

A’s share of profit = 30,938 + 4,062 = Rs 35,000
B’s share of profit = 30,937–
2,437 = Rs 28,500
C’s share of profit = 20,625–
1,625 = Rs 19,000

Answer:

Adjusting Entry

Journal

Date

Particulars

L.F.

Debit

Amount

Credit

Amount

 

X’s Capital A/c

Dr.

 

2,530

 

 

   To Y’s Capital A/c

 

 

1,005

 

   To Z’s Capital A/c

 

 

1,525

 

(Adjustment entry is made)

 

 

 

           

 

Working Notes:

 

Particulars

X

Y

Z

Total

Wrongly Credited

 

 

 

 

Interest on Capital for 2013-14  (Dr.)

(3,250)

(2,100)

(900)

6,250

Interest on Capital for 2014-15  (Dr.)

(3,500)

(2,000)

(1,100)

6,600

Interest on Capital for 2015-16  (Dr.)

(3,600)

(2,150)

(1,100)

6,850

 

(10,350)

(6,250)

(3,100)

19,700

Right Distribution

 

 

 

 

Profit distribution in 5 : 3 : 2      (Cr.)

3,125

1,875

1,250

(6,250)

Profit distribution in 2 : 2 : 1      (Cr.)

2,640

2,640

1,320

(6,600)

Profit distribution in 3 : 4 : 3      (Cr.)

2,055

2,740

2,055

(6,850)

 

7,820

7,255

4,625

(19,700)

Net Effect

2,530 (Dr.)

1,005 (Cr.)

1,525 (Cr.)

NIL

 

Page No 2.92:

Question 79:

Adjusting Entry

Journal

Date

Particulars

L.F.

Debit

Amount

Credit

Amount

 

X’s Capital A/c

Dr.

 

2,530

 

 

   To Y’s Capital A/c

 

 

1,005

 

   To Z’s Capital A/c

 

 

1,525

 

(Adjustment entry is made)

 

 

 

           

 

Working Notes:

 

Particulars

X

Y

Z

Total

Wrongly Credited

 

 

 

 

Interest on Capital for 2013-14  (Dr.)

(3,250)

(2,100)

(900)

6,250

Interest on Capital for 2014-15  (Dr.)

(3,500)

(2,000)

(1,100)

6,600

Interest on Capital for 2015-16  (Dr.)

(3,600)

(2,150)

(1,100)

6,850

 

(10,350)

(6,250)

(3,100)

19,700

Right Distribution

 

 

 

 

Profit distribution in 5 : 3 : 2      (Cr.)

3,125

1,875

1,250

(6,250)

Profit distribution in 2 : 2 : 1      (Cr.)

2,640

2,640

1,320

(6,600)

Profit distribution in 3 : 4 : 3      (Cr.)

2,055

2,740

2,055

(6,850)

 

7,820

7,255

4,625

(19,700)

Net Effect

2,530 (Dr.)

1,005 (Cr.)

1,525 (Cr.)

NIL

 

Answer:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount
Rs
Particulars Amount
Rs
Interest on Capital (WN2)   Profit and Loss A/c 12,11,600
X
60,000   (11,20,000 + 91,600)  
Y
60,000   Interest on Drawings (WN1)  
Z
60,000 1,80,000
X
26,000  
Salary to:  
Y
30,000  
X
3,84,000  
Z
33,000 89,000
Z
2,88,000 6,72,000    
Commission to X  89,600    
Profit transferred to:      
X’s Capital A/c
1,19,666      
Y’s Capital A/c
1,19,667      
Z’s Capital A/c
1,19,667 3,59,000    
  13,00,600   13,00,600
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2013         2013        
April 01 Cash/Bank A/c 80,000     April 01 Balance b/d 6,40,000 6,00,000 5,60,000
2014         April 01 Cash/Bank A/c     80,000
March 31 Balance c/d 5,60,000 6,00,000 6,40,000          
    6,40,000 6,00,000 6,40,000     6,40,000 6,00,000 6,40,000
                   

 

Partners’ Current Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2013         2013        
April 01 Balance b/d 20,000     April 01 Balance b/d   3,40,000 3,20,000
2014         2014        
March 31 Drawings A/c 4,80,000 6,00,000 7,20,000 March 31 Interest on Capital A/c 60,000 60,000 60,000
March 31 Interest on Drawings A/c 26,000 30,000 33,000 March 31 Salary 3,84,000   2,88,000
March 31 Balance c/d 1,27,266   34,667 March 31 Commission 89,600    
          March 31 P&L Appr. A/c 1,19,666 1,19,667 1,19,667
          March 31 Balance c/d   1,10,333  
    6,53,266 6,30,000 7,87,667     6,53,266 6,30,000 7,87,667
                   

Working Notes:

WN 1: Calculation of Interest on Drawings
Interest on Drawings = Total Drawings × Rate × 6.512Total Drawings = 40,000 × 12 = Rs 4,80,000Interest on X’s Drawings made in the beginning= 4,80,000 × 10100 × 6.512= Rs 26,000Interest on Drawings = Total Drawings × Rate × 612Total Drawings = 50,000 × 12 = Rs 6,00,000Interest on Y’s Drawings = 6,00,000× 10100 × 612=Rs 30,000Interest on Drawings = Total Drawings × Rate × 5.512Total Drawings = 60,000 × 12 = Rs 7,20,000Interest on Z’s Drawings made at the end = 7,20,000 × 10100 × 5.512= Rs 33,000

WN 2: Calculation of Interest on Capital

Interest (1st April – 1st Oct.) Interest (1st Oct. – 31st March) Total
X= 6,40,000 × 10100× 612 = Rs 32,000 X= 5,60,000 × 10100× 612 = Rs 28,000 Rs 60,000
Y= 6,00,000 × 10100× 612 = Rs 30,000 Y= 6,00,000 × 10100× 612 =Rs 30,000 Rs 60,000
Z= 5,60,000 × 10100× 612 = Rs 28,000 Z= 6,40,000 × 10100× 612 = Rs 32,000 Rs 60,000

Page No 2.92:

Question 80:

Profit and Loss Appropriation Account
for the year ended…
Dr.     Cr.
Particulars Amount
Rs
Particulars Amount
Rs
Interest on Capital (WN2)   Profit and Loss A/c 12,11,600
X
60,000   (11,20,000 + 91,600)  
Y
60,000   Interest on Drawings (WN1)  
Z
60,000 1,80,000
X
26,000  
Salary to:  
Y
30,000  
X
3,84,000  
Z
33,000 89,000
Z
2,88,000 6,72,000    
Commission to X  89,600    
Profit transferred to:      
X’s Capital A/c
1,19,666      
Y’s Capital A/c
1,19,667      
Z’s Capital A/c
1,19,667 3,59,000    
  13,00,600   13,00,600
       

 

Partners’ Capital Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2013         2013        
April 01 Cash/Bank A/c 80,000     April 01 Balance b/d 6,40,000 6,00,000 5,60,000
2014         April 01 Cash/Bank A/c     80,000
March 31 Balance c/d 5,60,000 6,00,000 6,40,000          
    6,40,000 6,00,000 6,40,000     6,40,000 6,00,000 6,40,000
                   

 

Partners’ Current Accounts
Dr.   Cr.
Date Particulars X Y Z Date Particulars X Y Z
2013         2013        
April 01 Balance b/d 20,000     April 01 Balance b/d   3,40,000 3,20,000
2014         2014        
March 31 Drawings A/c 4,80,000 6,00,000 7,20,000 March 31 Interest on Capital A/c 60,000 60,000 60,000
March 31 Interest on Drawings A/c 26,000 30,000 33,000 March 31 Salary 3,84,000   2,88,000
March 31 Balance c/d 1,27,266   34,667 March 31 Commission 89,600    
          March 31 P&L Appr. A/c 1,19,666 1,19,667 1,19,667
          March 31 Balance c/d   1,10,333  
    6,53,266 6,30,000 7,87,667     6,53,266 6,30,000 7,87,667
                   

Working Notes:

WN 1: Calculation of Interest on Drawings
Interest on Drawings = Total Drawings × Rate × 6.512Total Drawings = 40,000 × 12 = Rs 4,80,000Interest on X’s Drawings made in the beginning= 4,80,000 × 10100 × 6.512= Rs 26,000Interest on Drawings = Total Drawings × Rate × 612Total Drawings = 50,000 × 12 = Rs 6,00,000Interest on Y’s Drawings = 6,00,000× 10100 × 612=Rs 30,000Interest on Drawings = Total Drawings × Rate × 5.512Total Drawings = 60,000 × 12 = Rs 7,20,000Interest on Z’s Drawings made at the end = 7,20,000 × 10100 × 5.512= Rs 33,000

WN 2: Calculation of Interest on Capital

Interest (1st April – 1st Oct.) Interest (1st Oct. – 31st March) Total
X= 6,40,000 × 10100× 612 = Rs 32,000 X= 5,60,000 × 10100× 612 = Rs 28,000 Rs 60,000
Y= 6,00,000 × 10100× 612 = Rs 30,000 Y= 6,00,000 × 10100× 612 =Rs 30,000 Rs 60,000
Z= 5,60,000 × 10100× 612 = Rs 28,000 Z= 6,40,000 × 10100× 612 = Rs 32,000 Rs 60,000

Answer:

Profit and Loss Appropriation Account
for the year ended March 31,2016
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Interest on Capital   Profit & Loss A/c (Net Profit) 2,45,000
X
64,750   Interest on Drawings  
Y
39,375 1,04,125
X
4,200  
Profit trsfd. to Partner’s Cap. A/c  
Y
2,742 6,942
X
88,690      
Y
59,127 1,47,817    
  2,51,942   2,51,942
       

 

Partners’ Capital Account
Dr.   Cr.
Date Particulars X Y Date Particulars X Y
2015       2015      
Oct. 01 Furniture A/c 1,40,000 - April 01 Balance b/d 7,00,000 3,50,000
2016       Oct. 01 Furniture A/c - 87,500
March 31 Balance c/d 6,30,000 4,37,500 2016      
        Jan. 01 Stock A/c 70,000 -
               
    7,70,000 4,37,500     7,70,000 4,37,500
               

 

Partners’ Current Account
Dr.   Cr.
Date Particulars X Y Date Particulars X Y
        2015      
  Drawings A/c 98,000 42,000 April 01 Balance b/d 1,75,000 70,000
2016       2016      
Feb. 01 Stock A/c - 17,500 March 31 Interest on Capital 64,750 39,375
March 31 Interest on Drawings 4,200 2,742 March 31 Profit & Loss App. A/c 88,690 59,127
March 31 Balance c/d 2,26,240 1,06,260        
    3,28,440 1,68,502     3,28,440 1,68,502
               

Working Notes:
WN 1: Calculation of Interest on Capital
                                                                  XCapital on 1st April 2015                                 = 70,000 (7,00,000 × 10100)Less: Cap. withdrawn on 1.10.15 as Furniture  = 7,000 (1,40,000× 10100× 612)Add: Cap. introduced on 01.01.2016 as stock   = 1,750 (70,000 × 10100× 312)                                                                       Rs 64,750                                                               YCapital on 1st April 2015                                        = 35,000 (3,50,000 × 10100)Add: Cap. introduced on 01.10.2015 as furniture   = 4,375 (87,500 × 10100× 612)                                                                       Rs 39,375
WN 2:  Calculation of Interest of Drawings

For X
Date Amount Months Product
July 01, 2015 35,000 9 3,15,000
Jan. 01, 2016 63,000 3 1,89,000
      5,04,000
       

 Interest on Drawings= 5,04,000 × 10100× 112 = Rs 4,200

For Y
Date Amount Months Product
July 01, 2015 28,000 9 2,52,000
Jan. 01, 2016 14,000 3 42,000
Feb. 01, 2016 17,500 2 35,000
      3,29,000
       

 Interest on Drawings= 3,29,000 × 10100× 112 = Rs 2,742



Page No 2.93:

Question 81:

Profit and Loss Appropriation Account
for the year ended March 31,2016
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Interest on Capital   Profit & Loss A/c (Net Profit) 2,45,000
X
64,750   Interest on Drawings  
Y
39,375 1,04,125
X
4,200  
Profit trsfd. to Partner’s Cap. A/c  
Y
2,742 6,942
X
88,690      
Y
59,127 1,47,817    
  2,51,942   2,51,942
       

 

Partners’ Capital Account
Dr.   Cr.
Date Particulars X Y Date Particulars X Y
2015       2015      
Oct. 01 Furniture A/c 1,40,000 - April 01 Balance b/d 7,00,000 3,50,000
2016       Oct. 01 Furniture A/c - 87,500
March 31 Balance c/d 6,30,000 4,37,500 2016      
        Jan. 01 Stock A/c 70,000 -
               
    7,70,000 4,37,500     7,70,000 4,37,500
               

 

Partners’ Current Account
Dr.   Cr.
Date Particulars X Y Date Particulars X Y
        2015      
  Drawings A/c 98,000 42,000 April 01 Balance b/d 1,75,000 70,000
2016       2016      
Feb. 01 Stock A/c - 17,500 March 31 Interest on Capital 64,750 39,375
March 31 Interest on Drawings 4,200 2,742 March 31 Profit & Loss App. A/c 88,690 59,127
March 31 Balance c/d 2,26,240 1,06,260        
    3,28,440 1,68,502     3,28,440 1,68,502
               

Working Notes:
WN 1: Calculation of Interest on Capital
                                                                  XCapital on 1st April 2015                                 = 70,000 (7,00,000 × 10100)Less: Cap. withdrawn on 1.10.15 as Furniture  = 7,000 (1,40,000× 10100× 612)Add: Cap. introduced on 01.01.2016 as stock   = 1,750 (70,000 × 10100× 312)                                                                       Rs 64,750                                                               YCapital on 1st April 2015                                        = 35,000 (3,50,000 × 10100)Add: Cap. introduced on 01.10.2015 as furniture   = 4,375 (87,500 × 10100× 612)                                                                       Rs 39,375
WN 2:  Calculation of Interest of Drawings

For X
Date Amount Months Product
July 01, 2015 35,000 9 3,15,000
Jan. 01, 2016 63,000 3 1,89,000
      5,04,000
       

 Interest on Drawings= 5,04,000 × 10100× 112 = Rs 4,200

For Y
Date Amount Months Product
July 01, 2015 28,000 9 2,52,000
Jan. 01, 2016 14,000 3 42,000
Feb. 01, 2016 17,500 2 35,000
      3,29,000
       

 Interest on Drawings= 3,29,000 × 10100× 112 = Rs 2,742

Answer:

Profit and Loss Appropriation Account

for the year ended March 31, 2016

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Interest on Capital

 

Profit and Loss A/c

6,90,000

A’s Capital A/c

25,500

 

Interest on Drawings

 

B’s Capital A/c

16,500

 

A’s Capital A/c

2,600

 

C’s Capital A/c

18,300

60,300

B’s Capital A/c

1,925

 

General Reserve

55,600

C’s Capital A/c

1,500

6,025

Salary to:

 

 

 

A’s Capital A/c

72,000

 

 

 

B’s Capital A/c

48,000

 

 

 

C’s Capital A/c

54,000

1,74,000

 

 

Commission to:

 

 

 

A’s Capital A/c

55,200

 

 

 

B’s Capital A/c

69,000

 

 

 

C’s Capital A/c

21,296

1,45,496

 

 

Salary to Accountant (5,000 x 12)

60,000

 

 

Commission to Accountant

73,929

 

 

Profit transferred to:

 

 

 

A’s Capital A/c

56,311

 

 

 

B’s Capital A/c

42,233

 

 

 

C’s Capital A/c

28,156

1,26,700

 

 

 

6,96,025

 

6,96,025

 

 

 

 

Working Notes:

Calculation of Interest on Capital on Closing Balances

A's=4,25,000×6100=Rs 25,500B's=2,75,000×6100=Rs 16,500C's=3,05,000×6100=Rs 18,300

Calculation of Interest on Drawings

A's=(5,000×12)×8100×6.512=Rs 2,600B's=(4,375×12)×8100×5.512=Rs 1,925C's=(3,125×12)×8100×612=Rs 1,500

Calculation of Partners' Salary

A's=6,000×12=Rs 72,000B's=4,000×12=Rs 48,000C's=4,500×12=Rs 54,000

Calculation of Commission to A and B

A's=6,90,000×8100=Rs 55,200B's=6,90,000×10100=Rs 69,000

Calculation of Accountant's Commission

Commission to Accountant=6,90,000×12112=Rs 73,929

Calculation of C's Commission

Commission to C=Net Profit before interest on drawings but after appropriations×15100Net Profit before interest on drawings but after appropriations=6,90,000-60,300-55,600-1,74,000-55,200-69,000-60,000-73,929=Rs 1,41,971Commission to C=1,41,971×15100=Rs 21,296

Calculation of Profit Share of each Partner

A's=1,26,700×49=Rs 56,311B's=1,26,700×39=Rs 42,233C's=1,26,700×29=Rs 28,156

Note: The divisible profit as per the above solution is worked out as Rs 1,26,700. However, as per the textbook answer it should be Rs 1,51,672.



View NCERT Solutions for all chapters of Class 15