Double Entry Book Keeping Ts Grewal 2016 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 2016 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 2016 Solutions. All Double Entry Book Keeping Ts Grewal 2016 Solutions for class Class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 2.78:
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:
(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:
Answer:
In the absence of Partnership deed:
(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
Page No 2.78:
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:
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.
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:
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:
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
(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.
(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:
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:
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)
Page No 2.79:
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 |
|
|
Page No 2.79:
Answer:
Calculation of opening capital balance
Particulars | X | Y |
Capital at the end | 10,000 | 8,000 |
Less: Profit already credited
|
(1,000) | (1,000) |
Add: Drawings already debited
|
3,000 | |
Opening Capital | 9,000 | 10,000 |
Page No 2.79:
Answer:
Calculation of Interest on Capital
Calculation of Interest on Current Account Balances
Page No 2.79:
Answer:
Calculation of Interest on Capital
Calculation of Interest on Current Account Balances
Page No 2.80:
Answer:
Calculation of Interest on Capital
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
Page No 2.80:
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.
Page No 2.80:
Answer:
Page No 2.80:
Answer:
Page No 2.80:
Answer:
Total Drawings = Rs 30,000 (2,500 × 12)
(i) If drawings are made in the beginning of each month
(ii) If drawings are made in the middle of each month
(iii) If drawings are made in the end of each month
Page No 2.80:
Answer:
(i) If drawings are made in the beginning of each quarter
Total Drawings = Rs 48,000 (12,000 × 4)
(ii) If drawings are made at the end of each quarter
Total Drawings = Rs 48,000 (12,000 × 4)
(iii) If drawings are made in the middle of each quarter
Total Drawings = Rs 72,000 (18,000 × 4)
Page No 2.80:
Answer:
Page No 2.80:
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:
Answer:
Case I:
Case II:
Note: Since date of drawings is not given, thus, interest has been calculated for an average period of 6 months.
Page No 2.81:
Answer:
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:
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
For Y: Net Profit after charging Salaries and commission
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
Page No 2.81:
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
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
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:
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 | 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
WN 2: Calculation of Transfer to Reserve
Page No 2.81:
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:
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:
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
Page No 2.82:
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
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:
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
WN 2: Calculation of Interest on Drawings
When the date of withdrawal is not given interest on drawings is calculated for 6 months:
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
Page No 2.82:
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:
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
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)
WN 3: Calculation of Interest on Capital
Interest (1st April – 1st Oct.) | Interest (1st Oct. – 31st March) | Total |
22,000 | ||
17,500 | ||
9,000 |
Page No 2.83:
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:
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:
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 |
Particulars |
Kalu Rs |
Lalu |
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:
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
WN 2 Calculation of Profit Share of each Partner
Profit available for distribution = 21,000 − 5000 = Rs 16,000
- Distribution of first Rs 10,000 (50%, 30% and 20%)
- Distribution of Remaining Profit i.e. Rs 6,000 (16,000 − 10,000) equally
Therefore,
Page No 2.84:
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
Total Interest on Capital = 1,800 + 540 = Rs 2,340
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 | ||||
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
Page No 2.84:
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
WN 2 Calculation of Commission to Partners
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
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
Page No 2.84:
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 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
Page No 2.84:
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
Note: Interest on advances is calculated for an average period of six months because date of withdrawal is not given.
Page No 2.85:
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
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
Page No 2.85:
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 |
1,200 |
Mohan
|
150 | 390 | ||
Commission to Ram (WN4) | 52,500 | Interest on Current A/c (WN3) | ||||
Commission to Shyam (WN4) | 50,000 |
Shyam
|
855 | |||
Profit transferred to: |
Mohan
|
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
WN 2: Calculation of Interest on Drawings:
WN 3: Calculation of Interest on Current Account
WN 4: Calculation of Commission
Page No 2.85:
Answer:
Profit and Loss Account for the year ended March 31,2016 |
|||
Dr. |
|
|
Cr. |
Particulars |
Amount |