D. K. Goel (Volume-1)Class-12 Text Book Solutions
Chapter -1
Accounting For Partnership Firms – Fundamentals
SOLUTION : 12.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Salary
|
|
|
By Profit & Loss A/c
|
|
|
A 600 x 12
|
7,200
|
|
(Profit for the year)
|
1,72,000
|
|
B 400 x 12
|
4,800
|
12,000
|
By Interest on Drawings
|
|
|
To Commission to C
|
|
|
(4% on annual drawings)
|
|
|
(5% on 1,60,000)
|
|
8,000
|
B 400
|
|
|
To Interest on Capital:
|
|
|
C 600
|
1,000
|
|
A
|
6,000
|
|
|
|
|
B
|
12,000
|
|
|
|
|
C
|
18,000
|
36,000
|
|
|
|
To Profit transferred to :
|
|
|
|
|
|
A’s Current A/c
|
39,000
|
|
|
|
|
B’s Current A/c
|
39,000
|
|
|
|
|
C’s Current A/c
|
39,000
|
1,17,000
|
|
|
|
|
|
1,73,000
|
|
1,73,000
|
Note: Since 4% interest is to be charged on annual drawings, it will be charged for full year instead of six months.
SOLUTION: 13.
PARTNER’S CAPITAL ACCOUNTS
Dr. Cr.
|
Date
|
Particulars
|
A
|
B
|
C
|
Date
|
Particulars
|
A
|
B
|
C
|
|
2017
Mar. 31
|
|
`
|
`
|
`
|
2016
|
|
`
|
`
|
`
|
|
To Balance
|
|
|
|
April 1
|
By Bank
|
|
|
|
|
|
|
|
|
A/c
|
10,00,000
|
8,00,000
|
5,00,000
|
|
|
c/d
|
12,53,000
|
10,53,000
|
7,53,000
|
2017
|
|
|
|
|
|
|
|
|
|
|
Mar. 31
|
By P&L
|
|
|
|
|
|
|
|
|
|
|
Appr.
|
|
|
|
|
|
|
|
|
|
|
A/c
|
2,53,000
|
2,53,000
|
2,53,000
|
|
|
|
12,53,000
|
10,53,000
|
7,53,000
|
|
|
12,53,000
|
10,53,000
|
7,53,000
|
Dr. B’s LOAN ACCOUNT Cr.
|
Date
|
Particulars
|
`
|
Date
|
Particulars
|
`
|
|
2017 March 31
|
To Balance c/d
|
2,09,000
|
2016 July 1
|
By Bank A/c
|
2,00,000
|
|
|
|
2,09,000
|
2017 March 31
|
By Interest on Loan A/c
|
9,000
2,09,000
|
Dr. C’s LOAN ACCOUNT Cr.
|
Date
|
Particulars
|
`
|
Date
|
Particulars
|
`
|
|
2017 March 31
|
To Balance c/d
|
1,02,000
|
2016 Dec. 1
2017 March 31
|
By Bank A/c
By Interest on Loan A/c
|
1,00,000
2,000
|
|
1,02,000
|
1,02,000
|
Working Notes:
(1) In the absence of agreement, Interest on Loan is to be paid @6% p.a. and profits will be shared equally.
|
|
|
`
|
|
(2) Interest on B’s Loan
|
= 2,00,000 x 6/100 x 9/12
|
= 9,000
|
|
Interest on C’s Loan
|
= 1,00,000 x 6/100 x 4/12
|
= 2,000
|
|
|
Total
|
11,000
|
(3) Net Profit after interest on Loan = `7,70,000 – `11,000 = `7,59,000
(4) Each partner’s share of profit = `7,59,000 ÷ 3 = `2,53,000
SOLUTION : 14.
PROFIT AND LOSS ACCOUNT
Dr. for the year ended 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Mamta’s Loan
|
4,800
|
By Profit before interest
|
2,26,440
|
|
To Profit transferred to Profit &
|
|
|
|
|
Loss Appropriation A/c
|
2,21,640
|
|
|
|
|
2,26,440
|
|
2,26,440
|
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital:
|
|
|
By Profit & Loss A/c —
|
|
|
|
Lata
|
21,000
|
|
Net Profit
|
|
2,21,640
|
|
Mamta
|
14,000
|
35,000
|
By Interest on Drawings :
|
|
|
|
To Salary (Lata)
|
|
30,000
|
Lata
|
1,440
|
|
|
To General Reserve A/c
|
|
16,000
|
Mamta
|
1,920
|
3,360
|
|
To Profit transferred to :
|
|
|
|
|
|
|
Lata’s Capital A/c
|
1,00,800
|
|
|
|
|
|
Mamta’s Capital A/c
|
43,200
|
1,44,000
|
|
|
|
|
|
|
2,25,000
|
|
|
2,25,000
|
|
Notes: (1) Interest on Mamta’s Loan has been calculated at 6% p.a.
(2) Interest on Drawings has been calculated for an average period of 6 months.
|
|
(3) Distributable Profit =
Total of Credit side
|
2,25,000
|
|
(-) Total of Debit side (35,000 + 30,000)
|
65,000
|
|
General Reserve is 10% of 1,60,000 = 16,000
|
1,60,000
|
SOLUTION : 15.
Case (a) PROFIT AND LOSS ACCOUNT
Dr. for the year ending on 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Loan :
|
|
|
By Profit before interest
|
7,500
|
|
A
|
9,000
|
|
By Net Loss transferred to :
|
|
|
B
|
4,500
|
13,500
|
A’s Capital A/c 1,200
B’s Capital A/c 1,800
C’s Capital A/c 3,000
|
6,000
|
|
|
|
13,500
|
|
13,500
|
|
Case (b)
|
PROFIT AND LOSS ACCOUNT
|
|
|
Dr.
|
for the year ending on 31st March, 2016
|
Cr.
|
|
Particulars
|
`
|
Particulars
|
`
|
|
To Loss before interest
|
|
7,500
|
By Net Loss transferred to :
|
|
|
To Interest on Loan:
|
|
|
A’s Capital A/c 4,200
|
|
|
A
|
9,000
|
|
B’s Capital A/c 6,300
|
|
|
B
|
4,500
|
13,500
|
C’s Capital A/c 10,500
|
21,000
|
|
|
|
21,000
|
|
21,000
|
Notes: (i) Interest on A’s Loan = `2,00,000 x 6/100 x 9/12 = `9,000
Interest on B’s Loan = `1,00,000 x 6/100 x 9/12 = `4,500
SOLUTION : 16.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2015 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capitals :
|
|
|
By Profit & Loss A/c
|
|
|
P
|
40,000
|
|
Net Profit (`7,60,000
|
|
|
Q
|
24,000
|
64,000
|
—Rent `2,40,000)
|
5,20,000
|
|
To Q’s Salary
|
|
60,000
|
|
|
|
To Commission: P
|
60,000
|
|
|
|
|
Q
|
16,000
|
76,000
|
|
|
|
To Profit transferred to
|
|
|
|
|
|
P’s Capital A/c
|
1,92,000
|
|
|
|
|
Q’s Capital A/c
|
1,28,000
|
3,20,000
|
|
|
|
|
|
5,20,000
|
|
5,20,000
|
Dr. PARTNER’S CAPITAL ACCOUNTS Cr.
|
Date
|
Particulars
|
P
|
Q
|
Date
|
Particulars
|
P
|
Q
|
|
2015
|
|
`
|
`
|
2014
|
|
`
|
`
|
|
Mar. 31
|
To Drawings
|
40,000
|
30,000
|
Apr. 1
|
By Bal. b/d
|
5,00,000
|
3,00,000
|
|
Mar. 31
|
To Bal. c/d
|
7,52,000
|
4,98,000
|
2015
|
|
|
|
|
|
|
|
|
Mar. 31
|
By Interest on
|
|
|
|
|
|
|
|
|
Capital
|
40,000
|
24,000
|
|
|
|
|
|
Mar. 31
|
By Salary
|
|
60,000
|
|
|
|
|
|
Mar. 31
|
By Commi-
|
|
|
|
|
|
|
|
|
ssion
|
60,000
|
16,000
|
|
|
|
|
|
Mar. 31
|
By P & L App.
|
|
|
|
|
|
|
|
|
A/c (Profit)
|
1,92,000
|
1,28,000
|
|
|
|
7,92,000
|
5,28,000
|
|
|
7,92,000
|
5,28,000
|
Working Notes:
(1) Net Profit transferred from P & L A/c to P & L App. A/c
= `7,60,000 – Rent `2,40,000 = `5,20,000
(2) Net Profit after deducting interest on capitals, salary and P’s commission:
`5,20,000 – `64,000 – `60,000 – `60,000 = 3,36,000
Q’s Commission = 3,36,000 x 5/105 = 16,000
(3) Rent will be credited to Rent Payable Account.
SOLUTION : 17.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ending on 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital:
X 2/3 of45,000 30,000
Y 1/3 of 45,000 15,000
|
45,000
|
By Net Profit as per
Profit & Loss A/c
|
45,000
|
|
45,000
|
45,000
|
|
Working Note:
|
`
|
|
Interest on X’s Capital = 8% on `10,00,000
|
80,000
|
|
Interest on Y’s Capital = 8% on `5,00,000
|
40,000
|
|
|
1,20,000
|
Since available profit is only `45,000 which is less than appropriations of `1,20,000, profit will be distributed in the ratio of appropriations as follows :
Interest on Capital 80,000 : 40,000
or 2 : 1
SOLUTION : 18.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Transfer to Reserves
|
|
8,000
|
By Profit and Loss A/c
|
80,000
|
|
|
To Interest on Capitals :
|
|
|
Less : Interest on Puja’s
|
|
|
|
Pooja
|
7,000
|
|
Loan (20,000 x 6/100
|
|
|
Archna
|
3,000
|
10,000
|
x 5/12)
|
500
|
79,500
|
|
To Profit transferred to :
|
|
|
By Interest on drawings
|
|
|
|
Pooja’s Current A/c
|
41,280
|
|
Pooja
|
240
|
|
|
Archna’s Current A/c
|
20,640
|
61,920
|
Archna
|
180
|
420
|
|
|
|
79,920
|
|
|
79,920
|
|
Dr.
|
CURRENT ACCOUNTS
|
|
Cr.
|
|
Particulars
|
Pooja
|
Archna
|
Particulars
|
Pooja
|
Archna
|
|
1.4.2013
|
`
|
`
|
1.4.2013
|
`
|
`
|
|
To Balance b/d
|
—
|
23,000
|
By Balance b/d
|
5,000
|
—
|
|
31.3.2014
|
|
|
31.3.2014
|
|
|
|
To Drawings
|
4,800
|
3,600
|
By Interest on Capital
|
7,000
|
3,000
|
|
To Interest on Drawings
|
240
|
180
|
By Profit and Loss
|
|
|
|
To Balance c/d
|
48,240
|
—
|
Appropriation A/c
|
41,280
|
20,640
|
|
|
|
|
By Balance c/d
|
—
|
3,140
|
|
|
53,280
|
26,780
|
|
53,280
|
26,780
|
Note: Interest on Loan is not recorded in the Current Account.
Interest on Drawings
SOLUTION : 19 (A).
(i) SIMPLE METHOD
|
Date
|
|
Amount
`
|
Period
(Months upto March 31)
|
Interest @ 9%
`
|
|
|
|
|
April
|
30
|
8,000
|
11
|
660
|
|
June
|
30
|
6,000
|
9
|
405
|
|
September
|
30
|
5,000
|
6
|
225
|
|
December
|
31
|
12,000
|
3
|
270
|
|
January
|
31
|
10,000
|
2
|
150
|
|
|
|
41,000
|
|
1,710
|
|
(ii)
|
|
PRODUCT METHOD
|
|
|
Date
|
|
Amount
|
Period
|
Products
|
|
|
|
`
|
(Months upto March 31)
|
|
|
April
|
30
|
8,000
|
11
|
88,000
|
|
June
|
30
|
6,000
|
9
|
54,000
|
|
September
|
30
|
5,000
|
6
|
30,000
|
|
December
|
31
|
12,000
|
3
|
36,000
|
|
January
|
31
|
10,000
|
2
|
20,000
|
|
|
|
41,000
|
|
2,28,000
|
Interest = Total of Products x 9/100 x 1/12
= 2,28,000 x 9/100 x 1/12 = `1,710
SOLUTION : 19 (B).
(i) SIMPLE METHOD
|
Date
|
Amount
|
Period
|
Interest @ 10%
|
|
|
`
|
(Months upto March 31)
|
`
|
|
1st June
|
1,000
|
10
|
83
|
|
1st August
|
750
|
8
|
50
|
|
1st October
|
1,250
|
6
|
63
|
|
1st December
|
500
|
4
|
17
|
|
1st February
|
500
|
2
|
8
|
|
|
4,000
|
|
221
|
|
(ii)
|
PRODUCT METHOD
|
|
|
Date
|
Amount
|
Period
|
Products
|
|
|
`
|
(Months upto March 31)
|
|
|
1st June
|
1,000
|
10
|
10,000
|
|
1st August
|
750
|
8
|
6,000
|
|
1st October
|
1,250
|
6
|
7,500
|
|
1st December
|
500
|
4
|
2,000
|
|
1st February
|
500
|
2
|
1,000
|
|
4,000
|
|
26,500
|
Interest = Total of Products x 10/100 x 1/12
= 26,500 x 10/100 x 1/12 = `221
SOLUTION: 20 (A).
Gopal withdrew `1,000 p.m. regularly on the first day of every month during the year ended 31st March, 2014 for personal expenses. His interest on drawings will be calculated as follows:
12,000 x 15/100 x 6.5/12 = `975
SOLUTION: 20 (B).
(i) The interest on drawings of X who draws at the beginning of every month is:
48,000 x 9/100 x 6.5/12 = `2,340
(ii) The interest on drawings of Y who draws at the end of every month is:
48,000 x 9/100 x 5.5/12 = `1,980
(iii) The interest on drawings of Z who draws in the middle of every month is:
48,000 x 9/100 x 6/12 = `2,160
|
SOLUTION : 21.
|
|
|
Case (i)
|
Total Drawings for the year = `5,000 x 4
|
= `20,000
|
|
|
Average Period = (12 months + 3 months) ÷ 2
|
= 7.5 months
|
|
|
Interest on Drawings = `20,000 x 8/100 x 7.5/12
|
= `1,000
|
|
Case (ii)
|
Total Drawings for the year = `6,000 x 4
|
= `24,000
|
|
|
Average Period = (9 months + 0 month) ÷ 2
|
= 4.5 months
|
|
|
Interest on Drawings = `24,000 x 8/100 x 4.5/12
|
= `720
|
|
Case (iii)
|
Total Drawings for the year = `10,000 x 4
|
= `40,000
|
|
|
Average Period = (10.5 months + 1.5 months) ÷ 2
|
= 6 months
|
|
|
Interest on Drawings = `40,000 x 8/100 x 6/12
|
= ` 1,600
|
SOLUTION: 22.
Case (i) Average Period = (12 months +1 months)/2 = 6 ½ months
Interest on Drawings = `48,000 x 9/100 x 6.5/12 = `2,340
Case (ii) Average Period = (11 months + 0 months)/2 = 5 ½ months
Interest on Drawings = `60,000 x 9/100 x 5.5/12 = `2,475
Case (iii) Assuming that the drawings were made in the middle of every month:
Average Period = (11.5 months+ 0.5 month)/2 = 6 months
Interest on Drawings = `72,000 x 9/100 x 6/12 = `3,240
Case (iv) As the date of drawing is not given, interest will be calculated for an average period of 6 months.
Interest on Drawings = `72,000 x 9/100 x 6/12 = `3,240
Case (v)
|
Date
|
Amount of Drawings
`
|
Period (Months upto 31st March, 2007)
|
Products
`
|
|
30th April, 2015
|
10,000
|
11
|
1,10,000
|
|
1st July, 2015
|
15,000
|
9
|
1,35,000
|
|
1st Oct., 2015
|
18,000
|
6
|
1,08,000
|
|
30th Nov., 2015
|
12,000
|
4
|
48,000
|
|
31st March, 2016
|
20,000
|
0
|
—
|
|
|
|
|
4,01,000
|
|
Interest on Drawings = `4,01,000 x 9/100 x 1/12 = `3,008
|
|
Case (vi)
|
Average Period =
(12 months+ 3 months)/2
|
= 7 ½ months
|
|
|
Total Drawings for the year = `12,000 x 4
|
= `48,000
|
|
|
Interest on Drawings = `48,000 x 9/100 x 7.5/12
|
= `2,700
|
|
Case (vii)
|
Average Period = (9 months + 0 month)/2
|
= 4 ½ months
|
|
|
Total Drawings for the year = `18,000 x 4
|
= `72,000
|
|
|
Interest on Drawings = `72,000 x 9/100 x 4.5/12
|
= `2,430
|
|
Case (viii)
|
Average Period = (10.5 months + 1.5 months)/2
|
= 6 months
|
|
|
Total Drawings for the year = `18,000 x 4
|
= `72,000
|
|
|
Interest on Drawings = `72,000 x 9/100 x 6/12
|
= `3,240
|
SOLUTION : 23 (A).
Gupta withdraws `800 at the beginning of every month for the six months ending 30th September, 2013. Hence, his drawings for the period of six months would be:
Total drawings = 6 x `800 = `4,800.
(Time left after first drawing + Time left after last drawing)/2
= (6 + 1)/2 = 3.5 months.
4,800 x 15/100 x 3.5/12 = `210
SOLUTION : 23 (B).
Gupta withdraws `800 at the end of every month for the six months ending 30th September, 2013.
Total drawings = 6 x `800 = `4,800
(Time left after first drawing + Time left after last drawing)/2
= (5 + 0)/2 = 2.5 months.
4,800 x 15/100 x 2.5/12 = `150
SOLUTION : 23 (C).
Total Drawings of A = `15,000 x 6 = ` 90,000
Total Drawings of B = `20,000 x 6 = `1,20,000
Total Drawings of C = `25,000 x 6 = `1,50,000
|
|
A
|
B
|
C
|
|
Average Period
|
(6+1)/2 = 3.5 months
|
(5 + 0)/2 = 2.5 months
|
(5.5 + 0.5)/2 = 3 months
|
|
Interest on Drawings
|
`90,000 x 10/100 x 3.5/12 = `2,625
|
`1,20,000 x 10/100 x 2.5/12 = `2,500
|
`1,50,000 x 10/100 x 3/12 = `3,750
|
|
|
SOLUTION : 24 (A).
Total Drawings = `10,000 x 9 months = `90,000
Average Period = (9 months + 1 month)/2 = 5 months
Interest on Drawings = `90,000 x 9/100 x 5/12 = `3,375
SOLUTION : 24 (B).
Total Drawings = `10,000 x 9 months = `90,000
Average Period = (8 months + 0 month)/2 = 4 months
Interest on Drawings = `90,000 x 9/100 x 4/12 = `2,700
SOLUTION : 24 (C).
Total Drawings = `10,000 x 9 months = `90,000
Average Period = (8.5 months + 0.5 month)/2 = 4.5 months
Interest on Drawings = `90,000 x 9/100 x 4.5/2 = `3,038
SOLUTION : 25.
Case (i) Interest on Drawings = `60,000 x 8/100 x 6/12= `2,400
Case (ii) Since rate of interest is 8% and not 8% p.a. interest will be calculated for 12 months:
Interest on Drawings = `60,000 x 8/100 = `4,800
SOLUTION : 26.
PROFIT AND LOSS APPROPRIATION ACCOUNT
|
Dr. For the year ended 31st March. 2014
|
|
Cr.
|
|
Particulars
|
`
|
Particulars
|
`
|
|
To Salary to Amit
|
|
18,000
|
By Profit & Loss A/c
|
|
74,040
|
|
To Profits transferred to :
|
|
|
By Interest on Drawings :
|
|
|
|
Amit’s Current A/c
|
30,000
|
|
Amit
|
1,560
|
|
|
Nami’s Current A/c
|
20,000
|
|
Namit
|
1,320
|
|
|
Ruchi’s Current A/c
|
10,000
|
60,000
|
Ruchi
|
1,080
|
3,960
|
|
|
|
78,000
|
|
|
78,000
|
Dr. CURRENT ACCOUNTS Cr.
|
Date
|
Particulars
|
Amit
|
Namit
|
Ruchi
|
Date
|
Particulars
|
Amit
|
Namit
|
Ruchi
|
|
2013
|
|
`
|
`
|
`
|
2013
|
|
`
|
`
|
`
|
|
April 1
|
To Balance
|
|
|
|
April 1
|
By Balance
|
|
|
|
|
|
b/d
|
—
|
—
|
1,000
|
|
b/d
|
5,000
|
2,000
|
—
|
|
2014
|
|
|
|
|
2014
|
|
|
|
|
|
March
|
To Dra-
|
|
|
|
March
|
By Salary
|
18,000
|
—
|
—
|
|
31
|
wings
To Interest
|
24,000
|
24,000
|
24,000
|
31
|
By P & L
|
|
|
|
|
|
on Dra-
|
|
|
|
|
Appro-
|
|
|
|
|
|
Wings(1)
|
1,560
|
1,320
|
1,080
|
|
priation
A/c
|
30,000
|
20,000
|
10,000
|
|
|
To Balance
|
|
|
|
|
By Balance
|
|
|
|
|
|
c/d
|
27,440
|
—
|
—
|
|
c/d
|
—
|
3,320
|
16,080
|
|
|
|
53,000
|
25,320
|
26,080
|
|
|
53,000
|
25,320
|
26,080
|
(1) Calculation of Interest on Drawings:
Amit withdraws on the First day of each month
24,000 x 12/100 x 6.5/12 = `1,560
Namit withdraws on the last date of each month
24,000 x 12/100 x 5.5/12 = `1,320
Ruchi withdraws at the end of each quarter:
Average Period = (9 months + 0 month)/2 = 4.5 months
Interest on Drawings = 24,000 x 12/100 = `1,080
SOLUTION : 27.
JOURNAL
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016 Jan. 1
|
Q’s Capital A/c
To Bank A/c
(Withdrawal by 0 out of Capital)
|
Dr.
|
|
1,20,000
|
1,20,000
|
|
March 31
|
Profit and Loss A/c
To Profit and Loss Appropriation A/c
(The transfer of profit to Profit and Loss Appropriation A/c)
|
Dr.
|
|
4,30,000
|
4,30,000
|
|
March 31
|
Interest on Capital A/c
To P’s Capital A/c
To Q’s Capital A/c
(Interest on partner’s capitals)
|
Dr.
|
|
1,27,000
|
80,000
47,000
|
|
|
Profit and Loss Appropriation A/c Dr.
To Interest on Capital A/c
(Transfer of interest on Capital to Profit and Loss App. A/c)
|
|
1,27,000
|
1,27,000
|
|
March 31
|
P’s Capital A/c
R’s Capital A/c
To Interest on Drawings A/c
(Interest on partner’s drawings)
|
Dr.
Dr.
|
|
6,600
7,200
|
13,800
|
|
|
Interest on Drawings A/c Dr.
To Profit and Loss Appropriation A/c
(Transfer of interest on drawings to Profit and Loss App. A/c)
|
|
13,800
|
13,800
|
|
March 31
|
Profit and Loss Appropriation A/c
To P’s Capital A/c
To Q’s Capital A/c
To R’s Capital A/c
(Transfer of profit to capital accounts)
|
Dr.
|
|
3,16,800
|
1.05.600
1.05.600
1.05.600
|
|
Dr.
|
PARTNER’S CAPITAL ACCOUNTS
|
Cr.
|
|
Date
|
Particulars
|
P
|
Q
|
R
|
Date
|
Particulars
|
P
|
Q
|
R
|
|
2015
|
|
`
|
`
|
`
|
2015
|
|
`
|
`
|
`
|
|
Apr. 1
|
To Bal.
|
|
|
|
Apr. 1
|
By Bal.
|
|
|
|
|
|
b/d
|
|
|
20,000
|
|
b/d
|
8,00,000
|
5,00,000
|
|
|
2016
|
|
|
|
|
2016
|
|
|
|
|
|
Jan. 1
|
To Bank
|
|
|
|
Mar. 31
|
By Int.
|
|
|
|
|
|
A/c
|
|
1,20,000
|
|
|
on Capi-
|
|
|
|
|
Mar. 31
|
To Dra-
|
|
|
|
|
tal A/c
|
80,000
|
47,000
|
|
|
|
wings
|
|
|
|
Mar. 31
|
By P&L
|
|
|
|
|
|
A/c
|
1,20,000
|
|
1,20,000
|
|
App. A/c
|
1,05,600
|
1,05,600
|
1,05,600
|
|
Mar. 31
|
To Int.
|
|
|
|
Mar. 31
|
By Bal.
|
|
|
|
|
|
on
|
|
|
|
|
c/d
|
|
|
41,600
|
|
|
Drawin-
|
|
|
|
|
|
|
|
|
|
|
gs A/c
|
6,600
|
|
7,200
|
|
|
|
|
|
Mar. 31
|
To Bal.
|
|
|
|
|
|
|
|
|
|
c/d
|
8,59,000
|
5,32,600
|
|
|
|
|
|
|
|
|
9,85,600
|
6,52,600
|
1,47,200
|
|
|
9,85,600
|
6,52,600
|
1,47,200 |
Working Notes:
|
(1)
|
Interest on Q’s Capital:
|
`
|
|
|
On `5,00,000 for 9 months : 5,00,000 x 10/100 x 9/12
|
37,500
|
|
|
On `3,80,000 for 3 months : 3,80,000 x 10/100 x 3/12
|
9,500
|
|
|
|
47,000
|
|
(2)
|
Interest on drawings:
|
|
|
|
P’s Drawings : `10,000 x 12 = `1,20,000 x 12/100 x 5.5/12 =
|
6,600
|
|
|
R’s Drawings : `1,20,000 x 12/100 x 6/12 =
|
7,200
|
Note : In the absence of actual dates of drawings of/?, interest thereon has been
calculated for the average period i.e. 6 months.
(3) Divisible Profit =
`4,30,000 – Interest on Capital `1,27,000 + Interest on Drawings `13,800 = `3,16,800
Each Partner’s share = `3,16,800 ÷ 3 = `1,05,600
SOLUTION : 28.
Books of Active, Blunt and Circle
Profit & loss Appropriation A/c
Dr. for the year ended 31st March, 2015 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
|
|
|
By Profit & Loss A/c
|
|
|
|
Active
|
|
27,000
|
|
(Net Profit for the year)
|
5,93,120
|
|
Blunt
|
|
36,000
|
|
By Interest on Drawings :
|
|
|
|
Circle
|
|
21,000
|
84,000
|
Active 60,000 x 6/100 x 6.5/12
Blunt 84,000 x 6/100 x 5.5/12
Circle 80,000 x 6/100 x 6/12
|
= 1,950
= 2,310
= 2,400
|
6,660
|
|
To Salary’ :
Blunt
|
|
72,000
|
|
|
Circle
To Commission (Note 1)
|
48,000
|
1,20,000
|
|
Blunt
|
|
17,990
|
|
|
|
|
|
|
Circle
|
|
17,990
|
35,980
|
|
|
|
|
|
To Profit Transferred to :
|
|
|
|
|
|
|
|
(Note 2)
|
|
|
|
|
|
|
|
|
Active’s Current A/c 1,34,900
|
|
|
|
|
|
|
Blunt’s Current A/c
|
1,04,967
|
|
|
|
|
|
|
Circle’s Current A/c 1,19,933
|
3,59,800
|
|
|
|
|
|
|
|
|
5,99,780
|
|
|
|
5,99,780
|
|
Dr.
|
|
PARTNERS CURRENT ACCOUNTS
|
|
Cr.
|
|
Particulars
|
Active
|
Blunt
|
Circle
|
Particulars
|
Active
|
Blunt
|
Circle
|
|
To Drawings
|
`
60,000
|
`
84,000
|
`
80,000
|
By Int. on
|
`
|
`
|
`
|
|
To Int. on Dra-
|
|
|
|
Capital
|
27,000
|
36,000
|
21,000
|
|
wings
|
1,950
|
2,310
|
2,400
|
By Salary
|
|
72,000
|
48,000
|
|
To Bal. c/d
|
99,950
|
1,44,647
|
1,24,523
|
By Commission
By P & L App.
|
|
17,990
|
17,990
|
|
|
|
|
|
A/c
|
1,34,900
|
1,04,967
|
1,19,933
|
|
|
1,61,900
|
2,30,957
|
2,06,923
|
|
1,61,900
|
2,30,957
|
2,06,923
|
Working Note:
(1) Balance of Profit: `5,93,120 + 6,660 – 84,000 – 1,20,000 = `3,95,780
Commission to Blunt and Circle is 5% to each partner after charging such commission. Hence, the commission will be 5/110 to each partner.
Commission to Blunt = 3,95,780 x 5/110 = `17,990
Commission to Circle = 3,95,780 x 5/110 = `17,990
Divisible Profit: `3,95,780 – 17,990 – 17,990 = `3,59,800
|
|
Active
|
Blunt
|
Circle
|
|
|
|
`
|
`
|
`
|
|
|
Upto `2,70,000
Equally `3,59,800 – 2,70,000 = `89,800
in 1/2 : 1/6 : 1/3
|
90,000
|
90,000
|
90,000
|
|
|
|
|
|
|
|
44,900
|
14,967
|
29,933
|
|
|
|
|
|
|
1,34,900
|
1,04,967
|
1,19,933
|
|
SOLUTION : 29.
Interest on Capitals:
A = `3,00,000 x 10% = `30,000
B = `2,00,000 x 10% = `20,000
A
|
Date
|
Amount
|
Period
|
Products
|
|
|
`
|
|
`
|
|
30. 6.2012
|
20,000
|
9 months
|
1,80,000
|
|
31. 7.2012
|
10,000
|
8 months
|
80,000
|
|
1.10.2012
|
10,000
|
6 months
|
60,000
|
|
1. 3.2013
|
16,000
|
1 month
|
16,000
|
|
Total
|
3,36,000
|
A’s Interest on Drawing = Total of Products/12 x Rate of Interest/100
A = 3,36,000/12 x 10/100 = `2,800
B’s Interest on Drawings = B withdraws `6,000 at the end of each month thus interest
on his drawings would be :
72,000 x 10/100 x 5.5/12 = `3,300
Interest on Capital
SOLUTION : 30.
Case (i)
Dr. PROFIT AND LOSS APPROPRIATION A/C Cr.
|
Particulars
|
|
`
|
Particulars
|
`
|
|
To Profit transferred to :
X 2/3
|
6,000
|
|
By Profit & Loss A/c (Profit for the year)
|
9,000
|
|
Y 1/3
|
3,000
|
9,000
9,000
|
|
9,000
|
Case (ii)
Dr. PROFIT AND LOSS APPROPRIATION A/C Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Profit & Loss A/c
|
|
|
By Loss transferred to :
|
|
|
|
(Loss for the year)
|
|
6,000
|
X 2/3
|
4,000
|
|
|
|
|
|
Y 1/3
|
2,000
|
6,000
|
|
|
|
6,000
|
|
|
6,000
|
|
Case (iii)
Dr. PROFIT AND LOSS APPROPRIATION A/C
|
|
Cr.
|
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
|
|
|
By Profit & Loss A/c
|
|
9,000
|
|
X
|
3,000
|
|
(Profit for the year)
|
|
|
|
Y
|
1,800
|
4,800
|
|
|
|
|
To Profit transferred to :
|
|
|
|
|
|
|
X 2/3
|
2,800
|
|
|
|
|
|
Y 1/3
|
1,400
|
4,200
|
|
|
|
|
|
|
9,000
|
|
|
9,000
|
|
Case (iv)
Dr. PROFIT AND LOSS APPROPRIATION A/C
|
|
Cr.
|
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital:
|
|
|
By Profit & Loss A/c
|
|
3,000
|
|
X 3,000 x 5/8
|
|
1,875
|
(Profit for the year)
|
|
|
|
Y 3,000 x 3/8
|
|
1,125
|
|
|
|
|
|
|
3,000
|
|
|
3,000
|
Note : The available profit is `3,000 whereas the interest due on capitals is `4,800 {i.e., `3,000 + `1,800). Since the profit is less than the interest, the available profit will be distributed in the ratio of interest i.e., 3,000 : 1,800 or 5 : 3.
Case (v)
Dr. PROFIT AND LOSS A/C* Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
|
|
|
By Profit & Loss A/c
|
|
3,000
|
|
X
Y
|
3,000
1,800
|
|
(Profit for the year)
|
|
|
|
4,800
|
By Loss transferred to :
|
|
|
|
|
|
|
X 2/3
|
1,200
|
|
|
|
|
|
Y 1/3
|
600
|
1,800
|
|
|
|
4,800
|
|
|
4,800
|
*Since Interest on Capital is to be allowed even if firm incurs loss, it is debited to P&L A/c and not to P&L Appropriation A/c.
SOLUTION : 31.
(Case I)
Dr. PROFIT AND LOSS APPROPRIATION A/C Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital
A 42,000 x 4/7
B 42,000 x 3/7
|
24,000
18,000
|
By Profit & Loss Account
|
42,000
|
|
42,000
|
42,000
|
Note: The available profit is `42,000 whereas the interest due on capitals is `56,000 (i.e., `32,000 + `24,000). Since the profit is less than the interest, the available profit will be distributed in the ratio of interest i.e., 32,000 : 24,000 or 4 : 3.
(Case II)
Dr. PROFIT AND LOSS A/C Cr.
|
Particulars
|
|
|
Particulars
|
|
|
|
To Interest on Capital
A
|
32,000
|
|
By Profit & Loss Account By Loss Transferred to :
|
|
42,000
|
|
B
|
24,000
|
56,000
56,000
|
A 3/5
B 2/5
|
8,400
5,600
|
14,000
56,000
|
SOLUTION : 32.
In the Books of Brij and Nandan
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital
Brij’s Capital A/c
2,00,000 x 2/5 = 80,000
Nandan’s Capital A/c
2,00,000 x 3/5 = 1,20,000
|
2,00,000
|
By Profit & Loss A/c
(Net Profit)
|
2,00,000
|
|
|
2,00,000
|
|
2,00,000
|
Working Notes:
Interest on capital of Brij = `1,20,000
Interest on capital of Nandan = `1,80,000
3,00,000
The available profit is `2,00,000, whereas interest due on capitals is `3,00,000. Since the profit is less than interest, the available profit will be distributed amongst the partners in the ratio of their interest on capital i.e., 1,20,000 : 1,80,000 or 12 : 18 or 2 : 3.
SOLUTION : 33.
Case (i)
Dr. PROFIT AND LOSS ACCOUNT Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
Kavita
Leela
To Profit transferred
to Profit & Loss App. A/c
|
48,000
32,000
|
80,000
30,000
|
By Profit before interest
|
1,10,000
|
|
|
|
1,10,000
|
|
1,10,000
|
Dr. PROFIT AND LOSS APPROPRIATION ACCOUNT Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Profit transferred to :
|
|
By Profit & Loss A/c
|
30,000
|
|
Kavita’s Capital A/c
|
|
|
|
|
|
(2/3)
|
20,000
|
|
|
|
|
Leela’s Capital A/c
|
|
|
|
|
|
(1/3)
|
10,000
|
30,000
|
|
|
|
|
|
30,000
|
|
30,000
|
Case (ii)
Dr. PROFIT AND LOSS ACCOUNT Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital:
|
|
|
By Profit before interest
|
|
35,000
|
|
Kavita
|
48,000
|
|
By Loss transferred to :
|
|
|
|
Leela
|
32,000
|
80,000
|
Kavita’s Capital A/c
|
|
|
|
|
|
|
(2/3)
|
30,000
|
|
|
|
|
|
Leela’s Capital A/c
|
|
|
|
|
|
|
(1/3)
|
15,000
|
45,000
|
|
|
|
80,000
|
|
|
80,000
|
|
Case (iii)
|
|
|
|
|
|
|
Dr.
|
PROFIT AND LOSS ACCOUNT
|
|
Cr.
|
|
Particulars
|
`
|
Particulars
|
`
|
|
To Loss before interest
|
|
10,000
|
By Loss transferred to :
|
|
|
|
To Interest on Capital:
|
|
|
Kavita’s Capital A/c
|
|
|
|
Kavita
|
48,000
|
|
(2/3)
|
60,000
|
|
|
Leela
|
32,000
|
80,000
|
Leela’s Capital A/c
|
|
|
|
|
|
|
(1/3)
|
30,000
|
90,000
|
|
|
|
90,000
|
|
|
90,000
|
SOLUTION : 34.
In the books of Lalan & Balan
PROFIT AND LOSS ACCOUNT
Dr. for the year ended 31st March. 2011 Cr.
|
Particulars
|
|
`
|
Particulars
|
`
|
|
To Interest on Capital*
Lalan’s Current A/c
|
12,000
|
|
By Profit before Interest
By Profit and Loss Appropriation
|
30,000
|
|
Balan’s Current A/c
|
24,000
|
36,000
36,000
|
A/c (Loss transferred)
|
6,000
36,000
|
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March. 2011 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Profit & Loss A/c
|
|
By Interest on Drawings :
|
|
|
(Loss transferred)
|
6,000
|
Lalan’s Current A/c 225
|
|
|
|
|
Balan’s Current A/c 375
|
600
|
|
|
|
By Net Loss transferred to :
|
|
|
|
|
Lalan’s Current A/c 3,240
|
|
|
|
|
Balan’s Current A/c 2,160
|
5,400
|
|
|
6,000
|
|
6,000
|
Note: As the time period of drawings is not given, the interest will be charged for 6 months
Lalan : 3,000 x 15/100 x 6/12 = `225
Balan : 5,000 x 15/100 x 6/12 = `375
*Since Interest on Capital is to be allowed even if firm incurs loss, it is debited to P&L A/c and not to P&L Appropriation A/c.
SOLUTION 35
|
Ratio of effective capital will be calculated as under:—
|
Products
|
|
X: `90,000 for 6 months
|
5,40,000
|
|
`60,000 for 6 months
|
3,60,000
9,00,000
|
|
Y: `75,000 for 4 months
|
3,00,000
|
|
`90,000 for 4 months
|
3,60,000
|
|
`60,000 for 4 months
|
2,40,000
9,00,000
|
|
Z : `75,000 for 7 months
|
5,25,000
|
|
`1,35,000 for 5 months
|
6,75,000
12,00,000
|
Thus the profit sharing ratio would be:
9,00.000 : 9,00.000 : 12.00,000 or 3 : 3 : 4
Dr. PROFIT AND I.OSS APPROPRIATION ACCOUNT Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Profits transferred to :
|
|
By Profit & Loss A/c
|
42,000
|
|
X
|
12,600
|
|
|
|
|
Y
|
12,600
|
|
|
|
|
Z
|
16,800
|
42,000
|
|
|
|
|
|
42,000
|
|
42,000
|
|
|
|
|
|
|
Adjustment in the Closed Accounts
SOLUTION : 36 (A).
|
Interest on A’s Capital of `8,00,000 @ 8%
|
`
64,000
|
|
Interest on B’s Capital of `4,00,000 @ 8%
|
32,000
|
|
Interest on C’s Capital of `3,00,000 @ 8%
|
24,000
|
|
Total Interest to be allowed
|
` 1,20,000
|
This amount of `1,20,000 is an item of expense for the firm but this has not been recorded on the debit side of P & L Appropriation A/c of the previous year. As such the profit of the previous year will be reduced by this amount. Hence, this loss of `1,20,000 will be shared by the partners in their profit sharing ratio, i.e.. 2:1:1
A = `1,20,000 x 2/4 = `60,000
B = `1,20,000 x 1/4 = `30,000
C = `1,20,000 x 1/4 = `30,000
TABLE SHOWING ADJUSTMENT
|
Partner
|
Adjustment
|
Difference
|
|
Dr.
|
Cr.
|
Dr.
|
Cr.
|
|
A
|
60,000
|
64,000
|
|
4,000
|
|
B
|
30.000
|
32,000
|
|
2,000
|
|
C
|
30,000
|
24,000
|
6,000
|
|
JOURNAL ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
C’s Capital A/c Dr.
To A’s Capital A/c
To B’s Capital A/c
(Adjustment in respect of interest on capital omitted in previous year’s accounts)
|
|
6,000
|
4,000
2,000
|
SOLUTION: 36 (B).
|
A’s Interest on Capital
|
= `1,20,000 x 5/100 = `6,000
|
|
B’s Interest on Capital
|
= `70,000 x 5/100= `3,500
|
|
C’s Interest on Capital
|
= `50,000 x 5/100 = `2,500
|
TABLE SHOWING ADJUSTMENT
|
Partner
|
Adjustment
|
Difference
|
|
Dr.
|
Cr.
|
Dr.
|
Cr.
|
|
A
|
5,000
|
6,000
|
|
1,000
|
|
B
|
4,000
|
3,500
|
500
|
|
|
C
|
3,000
|
2,500
|
500
|
|
JOURNAL ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016
March, 31
|
B’s Capital A/c
C’s Capital A/c
To A’s Capital A/c
(Adjustment in respect of interest on capital omitted in previous year’s accounts)
|
Dr.
Dr.
|
|
500
500
|
1,000
|
|
|
|
|
|
|
SOLUTION : 37.
|
|
|
`
|
|
A
|
8% on `4,00,000 for 2 years
|
= 64,000
|
|
B
|
8% on `6,00,000 for 2 years
|
= 96,000
|
|
C
|
8% on `8,00,000 for 2 years
|
= 1,28,000
|
|
|
|
2,88,000
|
TABLE SHOWING ADJUSTMENT
|
|
A
|
B
|
C
|
Total
|
|
Interest on Capital
|
(Cr.)
|
`
64,000
|
`
96,000
|
`
1,28,000
|
2,88,000
|
|
Division of `2,88,000 in profit
sharing ratio i.e. 1 : 2 : 3 (Dr.)
|
48,000
|
96,000
|
1,44,000
|
2,88,000
|
|
Difference
|
(Cr.) 16,000
|
—
|
(Dr.) 16,000
|
—
|
|
|
|
|
|
|
JOURNAL ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr.( `)
|
Cr.( `)
|
|
2016
March 31
|
C’s Current A/c Dr.
To A’s Current A/c
(Omission of interest on Capital for 2 years rectified)
|
|
16,000
|
16,000
|
SOLUTION: 38.
Interest charged on A’s drawings = `8,000
Interest charged on B’s drawings = `6,000
Interest charged on C’s drawings = `4,000
` 18,000
This amount of `18,000 is an item of income for the firm but this has not been recorded on the credit side of P & L Appropriation A/c of the previous year. As such the profit of the previous year will now be increased by this amount. Hence, this profit of `18,000 will be shared by the partners in their profit sharing ratio of 5 : 3 : 1 which amounts to A `10,000, B `6,000 and C `2,000.
TABLE SHOWING ADJUSTMENTS
|
Partner
|
Adjustment
|
Difference
|
|
Dr.
|
Cr.
|
Dr.
|
Cr.
|
|
A
|
8,000
|
10,000
|
|
2,000
|
|
B
|
6,000
|
6,000
|
|
|
|
C
|
4,000
|
2,000
|
2,000
|
|
JOURNAL ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
C’s Capital A/c Dr.
To A’s Capital A/c
(Adjustment for omission of interest on drawings)
|
|
2,000
|
2,000
|
SOLUTION: 39.
|
Calculation of Interest on Drawings :
|
|
|
A : 6% on `20,000 for 6 months
|
`
600
|
|
B : 6% on `24,000 for 6 months
|
720
|
|
C : 6% on `32,000 for 6 months
|
960
|
|
D : 6% on `44,000 for 6 months
|
1,320
|
|
|
3,600
|
TABLE SHOWING ADJUSTMENT
|
|
A
|
B
|
C
|
D
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
|
Interest on Drawings (Dr.) Division of 3,600 in 2 : 2 : 3 : 3
|
600
|
720
|
960
|
1,320
|
3,600
|
|
(Cr.)
|
720
|
720
|
1,080
|
1,080
|
3,600
|
|
Difference
|
Cr. 120
|
—
|
Cr. 120
|
Dr. 240
|
—
|
JOURNAL ENTRY
|
Date
|
Particulars
|
LF.
|
Dr.( `)
|
Cr.( `)
|
|
|
D’s Capital A/c Dr.
To A’s Capital A/c
To C’s Capital A/c
(Omission of interest on drawings, now rectified)
|
|
240
|
120
120
|
SOLUTION : 40.
A’s Drawings = `50,000 x 12 = `6,00,000
Interest on A’s Drawings will be charged for 6.5 months
6,00,000 x 12/100 x 6.5/12 = `39,000
TABLE SHOWING ADJUSTMENT
|
|
|
A
|
B
|
Total
|
|
Interest on Drawings
|
(Dr.)
|
`
39,000
|
`
|
39,000
|
|
Division of `39,000 in 2 : 1
|
(Cr.)
|
26,000
|
13,000
|
|
|
Difference
|
|
Dr. 13,000
|
Cr. 13,000
|
39,000
|
ADJUSTMENT ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016 April 1
|
A’s Capital A/c Dr.
To B’s Capital A/c
(Adjustment of Omission of interest on A’s drawings)
|
|
13,000
|
13,000
|
SOLUTION : 41.
TABLE SHOWING ADJUSTMENT
|
|
Anil
|
Sunil
|
Sanjay
|
Total
|
|
|
Cr. (`)
|
Cr. (`)
|
Cr. (`)
|
(`)
|
|
Interest on Capitals @ 10% p.a.
|
|
|
|
|
|
I) for the year ended 31st March 2015
|
80,000
|
70,000
|
30,000
|
1,80,000
|
|
II) for the year ended 31st March 2016
|
80,000
|
70,000
|
30,000
|
1,80,000
|
|
Total Amount Payable (Cr.)
|
1,60,000
|
1,40,000
|
60,000
|
3,60,000
|
|
Division of Firm’s loss will be as under :
|
Dr. (`)
|
Dr.( `)
|
Dr.( `)
|
(`)
|
|
I) for the year ended 31st March 2015
|
|
|
|
|
|
in the ratio of 4 : 3 : 2
|
80,000
|
60,000
|
40,000
|
1,80,000
|
|
II) for the year ended 31st March 2016
|
|
|
|
|
|
in the ratio of 3 : 2 : 1
|
90,000
|
60,000
|
30,000
|
1,80,000
|
|
Total Loss (Dr)
|
1,70,000
|
1,20,000
|
70,000
|
3,60,000
|
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016 April 1
|
Anil’s Current A/c Dr.
Sanjay’s Current A/c Dr.
To Sunil’s Current A/c
(Adjustment for the omission of two years’ interest on capitals)
|
|
10,000
10,000
|
20,000
|
SOLUTION : 42.
TABLE SHOWING ADJUSTMENTS
|
|
P
|
Q
|
R
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest on Capitals @ 12% p.a.
|
6,000
|
3,600
|
2,400
|
12,000
|
|
Salary to Partners
|
|
6,000
|
—
|
12,000
|
18,000
|
|
Total Amount Payable
Division of firm’s loss of `30,000
|
(Cr.)
|
12,000
|
3,600
|
14,400
|
30,000
|
|
in 2 : 1 : 1
|
(Dr.)
|
15,000
|
7,500
|
7,500
|
30,000
|
|
Net Effect
|
|
(Dr.) 3,000
|
(Dr.) 3,900
|
(Cr.) 6,900
|
|
JOURNAL ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr.( `)
|
Cr.( `)
|
|
2011 April 1
|
P’s Capital A/c Dr.
Q’s Capital A/c Dr.
To R’s Capital A/c
(Adjustment for the omission of interest on capitals and salary)
|
|
3,000
3,900
|
6,900
|
SOLUTION : 43 (A)
TABLE SHOWING ADJUSTMENTS
|
|
A
|
B
|
Total
|
|
|
`
|
`
|
`
|
|
Interest on Capital (Cr.)
|
48,000
|
24,000
|
72,000
|
|
Commission due to B
|
—
|
20,000
|
20,000
|
|
Salary to A
|
50,000
|
—
|
50,000
|
|
|
98,000
|
44,000
|
1,42,000
|
|
Less : Interest on Drawings (Dr.)
|
12,000
|
10,000
|
22,000
|
|
(Cr.)
|
86,000
|
34,000
|
1,20,000
|
|
Division of Firm’s loss of `1,20,000 in 2 : 1 (Dr.)
|
80,000
|
40,000
|
|
|
|
(Cr.) 6,000
|
(Dr.) 6,000
|
—
|
Adjustment Entry:—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
10th April, 2016
|
B’s Capital A/c
To A’s Capital A/c (Adjustment for omissions)
|
Dr.
|
|
6,000
|
6,000
|
|
|
|
|
|
|
SOLUTION : 43 (B)
TABLE SHOWING ADJUSTMENTS
|
|
|
Kumar
|
Raja
|
Total
|
|
Interest on Capital
|
(Cr.)
|
`
81,000
|
`
36,000
|
`
1,17,000
|
|
Salary
|
(Cr.)
|
50,000
|
36,000
|
86,000
|
|
Division of firm’s loss of `2,03,000 in 7 : 3
|
(Dr.)
|
1,31,000
1,42,100
|
72,000
60,900
|
2,03,000
2,78,000
|
|
Net Effect
|
|
(Dr.) 11,100
|
(Cr.) 11,100
|
—
|
ADJUSTMENT ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr.( `)
|
Cr.( `)
|
|
2007 March 31
|
Kumar’s Current A/c Dr.
To Raja’s Current A/c
(Adjustment for omission of interest on capital and salary)
|
|
11,100
|
11,100
|
SOLUTION : 44.
TABLE SHOWING ADJUSTMENT
|
|
A
|
B
|
C
|
Total
|
|
Salary
Interest on Capital
|
`
24,000
|
`
60,000
15,000
|
`
40,000
6,000
|
`
1,00,000
45,000
|
|
Total amount payable (Cr.)
|
24,000
|
75,000
|
46,000
|
1,45,000
|
|
Division of firm’s loss of ` 1,45,000 in 2 : 2 : 1 (Dr.)
|
58,000
|
58,000
|
29,000
|
1,45,000
|
|
Adjustment for Manager’s Commission :
10/110 of `2,20,000 = `20,000 in 2:2:1
|
(Dr.) 34,000
|
(Cr.) 17,000
|
(Cr.) 17,000
|
|
|
(Dr.) 8,000
|
(Dr.) 8,000
|
(Dr.) 4,000
|
20,000
|
|
Net Effect
|
(Dr.) 42,000
|
(Cr.)
9,000
|
(Cr.) 13,000
|
(Cr.) 20,000
|
RECTIFYING ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr.( `)
|
Cr.( `)
|
|
|
A’s Current A/c Dr.
To B’s Current A/c
To C’s Current A/c
To Manager’s Commission Outstanding A/c
(Adjustment for omissions of salary, interest on capitals and manager’s commission)
|
|
42,000
|
9,000
13,000
20,000
|
SOLUTION : 45.
TABLE SHOWING ADJUSTMENTS
|
|
Suresh
|
Ramesh
|
Total
|
|
|
`
|
`
|
`
|
|
Interest on Capital (Cr.)
|
45,000
|
30,000
|
75,000
|
|
Salary (Cr.)
Profit remaining after allowing interest on capital and salary’ will be `2,34,000 – `75,000 – `84,000 = `75,000. It will be divided in their profit sharing ratio, i.e. 3 : 2
|
60,000
|
24,000
|
84,000
|
|
45,000
|
30,000
|
75,000
|
|
Net amount which should have been received (Cr.)
|
1.50,000
|
84,000
|
2,34,000
|
|
Less : Profit already distributed equally (Dr.)
|
1,17,000
|
1.17,000
|
2,34,000
|
|
Net Effect
|
(Cr.) 33,000
|
(Dr.) 33,000
|
|
ADJUSTMENT ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr.( `)
|
Cr.( `)
|
|
2007 March 3 1
|
Ramesh’s Current A/c Dr.
To Suresh’s Current A/c
(Adjustment for interest on Capital, salary and wrong distribution of profit)
|
|
33,000
|
33,000
|
SOLUTION : 46.
STATEMENT OF ADJUSTMENT
|
|
A
|
B
|
C
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Salary to C
|
—
|
—
|
1,20,000
|
1,20,000
|
|
Interest on Capitals @ 5% p.a.
|
25,000
|
12,500
|
12,500
|
50,000
|
|
Balance profit i.e.
`3,30,000 – `1,20,000 – `50,000 = `1,60,000 distributed among partners in the ratio of 2 : 1 : 1
|
80,000
|
40,000
|
40,000
|
1,60,000
|
|
Net amount which should have been
received (Cr.)
|
1,05,000
|
52,500
|
1,72,500
|
3,30,000
|
|
Less : Profit already distributed (Dr.)
|
1,10,000
|
1,10,000
|
1,10,000
|
3,30,000
|
|
Net Effect
|
(Dr.) 5,000
|
(Dr.) 57,500
|
(Cr.) 62,500
|
.
|
ADJUSTMENT ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr.( `)
|
Cr.( `)
|
|
2016
March 31
|
A’s Capital A/c Dr.
B’s Capital A/e Dr.
To C’s Capital A/c
(Adjustment for the omission of Salary and interest on Capital)
|
|
5,000
57,500
|
62,500
|
SOLUTION : 47.
STATEMENT OF ADJUSTMENT
|
|
A
|
B
|
C
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest on capital
|
5,000
|
10,000
|
1 5,000
|
30,000
|
|
Salary
Commission : (5% on `3,60,000 – Interest on Capital `30,000)
Remaining Profit i.e. `3,60,000 – `30,000 – `60,000 – `16,500 = `2,53,500 will be divided in their profit sharing ratio i.e. 2:3:5
|
60,000
50,700
|
76,050
|
16,500
1,26,750
|
60,000
16,500
2,53,500
|
|
Net amount which should have been received (Cr.)
|
1,15,700
|
86,050
|
1,58,250
|
3,60,000
|
|
Less : Profit already distributed in 1 : 2 : 3 (Dr.)
|
60,000
|
1,20,000
|
1,80,000
|
3,60,000
|
|
Net Effect
|
(Cr.) 55,700
|
(Dr.) 33,950
|
(Dr.) 21,750
|
—
|
ADJUSTMENT ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr.( `)
|
Cr.( `)
|
|
2014
March 31
|
B’s Capital A/c Dr.
C’s Capital A/c Dr.
To A’s Capital A/c
(Adjustment for the omissions)
|
|
33,950
21,750
|
|
|
|
55,700
|
SOLUTION : 48.
TABLE SHOWING ADJUSTMENTS
|
|
A
|
B
|
C
|
Total
|
|
|
|
`
|
`
|
`
|
`
|
|
|
Salary (Cr.)
|
6,000
|
6,000
50,000(1)
|
|
12,000
|
|
|
Commission (Cr.)
|
|
18,000
|
18,000
|
|
|
Profit guaranteed to B (Cr.)
Remaining Profit i.e. `1,50,000 – `12,000 – `18,000 – `50,000 = `70,000 will be divided between A and C in 3 : 2 (Cr.)
|
|
|
50,000
|
|
|
|
|
|
42,000
|
—
|
28,000
|
70,000
|
|
|
(Cr.)
|
48,000
|
56,000
|
46,000
|
1,50,000
|
|
|
Less : Profit already distributed
|
|
|
|
|
|
|
(`1,50,000 in 2 : 2 : 1) (Dr.)
|
60,000
|
60,000
|
30,000
|
1,50,000
|
|
|
Net Effect
|
(Dr.)
|
(Dr.)
|
(Cr.)
|
—
|
|
|
|
12,000
|
4,000
|
16,000
|
|
|
Adjustment Entry :—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016 March 31
|
A’s Capital A/c Dr.
B’s Capital A/c Dr.
To C’s Capital A/c
(Adjustment for omissions)
|
|
12,000
4,000
|
16,000
|
Working Note:
(1) Profit remaining after allowing salary and commission will be
`1,50,000 – `12,000 – `18,000 = `1,20,000
B’s Share = 1,20,000 x 3/8 = `45,000.
Since it is less than guaranteed amount of `50,000, he will be entitled to `50,000.
SOLUTION : 49.
TABLE SHOWING ADJUSTMENT
|
|
X
|
Y
|
Z
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest already credited @ 8%
|
16,000
|
12,000
|
10,000
|
38,000
|
|
Interest that should have been credited @ 10%
|
20,000
|
15,000
|
12,500
|
47,500
|
|
Partners less credited with (Cr.)
By allowing this interest, the profits of the firm will be reduced by `9,500. This loss will be divided in the ratio of 5:3:2. (Dr.)
|
4,000
|
3,000
|
2,500
|
9,500
|
|
4,750
|
2,850
|
1,900
|
9,500
|
|
Net effect
|
(Dr.)
|
(Cr.)
|
(Cr.)
|
—
|
|
750
|
150
|
600
|
|
Adjustment Entry :—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014 March 31
|
X’s Current A/c Dr.
To Y’s Current A/c
To Z’s Current A/c
(Interest less charged on capital, now rectified)
|
|
750
|
150
600
|
SOLUTION : 50.
TABLE SHOWING ADJUSTMENT
|
|
A
|
B
|
C
|
Total
|
|
|
`
|
`
|
`
|
|
|
Interest already credited @ 10%
|
10,000
|
20,000
|
30,000
|
60,000
|
|
Interest that should have been credited @ 9%
|
9,000
|
18,000
|
27,000
|
54,000
|
|
Partners Over credited with (Dr.)
By disallowing this interest, the profits of the firm will be increased by `6,000. This profit shall be divided in the ratio of
4:3:3 (Cr.)
|
1,000
|
2,000
|
3,000
|
6,000
|
|
2,400
|
1,800
|
1,800
|
6,000
|
|
Net effect
|
(Cr.)
1,400
|
(Dr.)
200
|
(Dr.)
1,200
|
—
|
Adjustment Entry:—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014 March 31
|
B’s Current A/c Dr.
C’s Current A/c Dr.
To A’s Current A/c
(Interest on Capitals excessive charged, now rectified)
|
|
200
1,200
|
1,400
|
SOLUTION : 51.
TABLE SHOWING ADJUSTMENT
|
|
A
|
B
|
C
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest allowed on Capitals @ 5% p.a.
|
Dr.
|
Dr.
|
Dr.
|
|
|
For the year 2016
|
4,200
|
2,400
|
1,320
|
7,920
|
|
For the year 2017
|
4,320
|
2,520
|
1,320
|
8,160
|
|
Total amount recoverable from partners (Dr.)
|
8,520
|
4,920
|
2,640
|
16,080
|
|
Division of firm’s profit will be as under:
|
Cr
|
Cr.
|
Cr.
|
|
|
For the year 2016 in the ratio of 2 : 2 : 1
|
3,168
|
3,168
|
1,584
|
7,920
|
|
For the year 2017 in the ratio of 3 : 4 : 3
|
2,448
|
3,264
|
2,448
|
8,160
|
|
Total pro fit distributed among partners (Cr.)
|
5,616
|
6,432
|
4,032
|
16,080
|
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2017 April 1
|
A’s Capital A/c (8,520 – 5,616) Dr.
To B’s Capital A/c (4,920 – 6,432)
To C’s Capital A/c (2,640 – 4,032)
(Interest on Capital wrongly provided in the accounts for two years, now adjusted)
|
|
2,904
|
1,512
1,392
|
SOLUTION : 52.
(a) Total Profits for the past three years:
`2,00,000 + `4,50,000 + `5,50,000 = `12,00,000
ADJUSTMENT TABLE
|
Particulars
|
Charu
|
Deepika
|
Era
|
|
|
`
|
`
|
`
|
|
Profit already Credited
(`12,00,000 in 1 : 1 : 1)
|
4,00,000
|
4,00,000
|
4,00,000
|
|
Profit to be Credited
(`12,00,000 in 4 : 3 : 3)
|
4,80,000
|
3,60,000
|
3,60,000
|
|
Net Effect
|
Cr. 80,000
|
Dr. 40,000
|
Dr. 40,000
|
ADJUSTING JOURNAL ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
Deepika’s Capital A/c Dr.
Era’s Capital A/c Dr.
To Charu’s Capital A/c
(Adjustment made for change in profit sharing ratio)
|
|
40,000
40,000
|
80,000
|
(b) Values involved are:
(i) Recognition of Charu’s efforts (ii) Ethics or Morality
SOLUTION: 53.
TABLE SHOWING ADJUSTMENTS
|
Particulars
|
Sachin
|
Kapil
|
Rashmi
|
|
Total Profits for three years
`60,000 + `47,000 + `55,000 = ` 1,62,000
This Profit has already been divided in
|
`
|
`
|
`
|
|
the ratio of 3 : 2 : 1
If Profits are shared equally :
|
81,000
|
54,000
|
27,000
|
|
1,62,000/3 = 54,000
|
54,000
|
54,000
|
54,000
|
|
Net Effect
|
(Dr.) 27,000
|
—
|
(Cr.) 27,000
|
Adjustment Entry:—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
Sachin’s Capital A/c Dr.
To Rashmi’s Capital A/c
(Adjustment on account of change in profit sharing ratio for the last three years)
|
|
27,000
|
27,000
|
SOLUTION: 54 (A).
Interest on Capitals should always be calculated on the Capitals at the beginning of the year. In the above question, the Capitals at the beginning of the year have not been given. Hence, first of all, it is necessary to calculate the amount of opening Capitals:
|
Particulars
|
Mohan
|
Vijay
|
Anil
|
|
Capitals as on 31 -3-2011
|
30,000
|
`
25,000
|
`
20,000
|
|
Less : Share of Profit (which has already been added)
|
8,000
|
8,000
|
8,000
|
|
Add: Drawings (which were previously deducted)
Capitals as on 1-4-2010
|
22,000
5,000
|
17.000
4,000
|
12,000
3,000
|
|
27,000
|
21,000
|
15,000
|
NET EFFECT ON CAPITAL ACCOUNTS
|
Particulars
|
Mohan
|
Vijay
|
Anil
|
Firm
|
|
Interest on Opening Capitals @ 10%
|
`
2,700
|
`
2,100
|
`
1,500
|
|
|
Less : Interest on Drawings
|
250
|
200
|
150
|
|
|
Balance
|
2,450
|
1,900
|
1,350
|
5,700
|
|
Division of firm’s loss equally
|
1,900
|
1,900
|
1,900
|
(Loss)
|
|
|
(Cr.) 550
|
—
|
(Dr.) 550
|
|
Adjustment Entry:—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2011 March 31
|
Anil’s Capital A/c Dr.
To Mohan’s Capital A/c
(Adjustment on account of the omission of the interest on Capitals and Drawings in the accounts)
|
|
550
|
550
|
Dr. REVISED CAPITAL ACCOUNTS Cr.
|
Date
|
Particulars
|
Mohan
|
Vijay
|
Anil
|
Date
|
Particulars
|
Mohan
|
Vijay
|
Anil
|
|
2014
|
|
`
|
`
|
`
|
2013
|
|
`
|
`
|
`
|
|
Mar. 31
|
To
|
|
|
|
April 1
|
By Balance
|
|
|
|
|
|
Mohan’s
|
|
|
|
|
b/d
|
30,000
|
25,000
|
20,000
|
|
|
Capital
|
|
|
|
2014
|
|
|
|
|
|
|
A/c
|
—
|
—
|
550
|
Mar. 31
|
By Anil’s
|
|
|
|
|
Mar. 31
|
To Balance
|
|
|
|
|
Capital
|
|
|
|
|
|
c/d
|
30,550
|
25,000
|
19,450
|
|
A/c
|
550
|
—
|
—
|
|
|
|
30,550
|
25,000
|
20,000
|
|
|
30,550
|
25,000
|
20,000
|
SOLUTION : 54 (B).
|
|
|
A
|
B
|
C
|
|
|
|
`
|
`
|
`
|
|
Closing Capitals
|
|
20,000
|
15,000
|
10,000
|
|
Less : Share of Profit
|
|
5,000
|
2,500
|
2,500
|
|
|
|
15,000
|
12,500
|
7,500
|
|
Add: Drawings
|
|
1,000
|
800
|
500
|
|
Opening Capitals
|
|
16,000
|
13,300
|
8,000
|
|
NET EFFECT ON CAPITAL ACCOUNTS
|
|
|
|
Particulars
|
A
|
B
|
C
|
Firm
|
|
|
`
|
`
|
`
|
|
|
Interest on Opening Capitals
|
1,600
|
1,330
|
800
|
|
|
Less : Interest on Drawings
|
130
|
90
|
50
|
|
|
Balance (Cr.)
|
1,470
|
1,240
|
750
|
3,460
|
|
Division of firm’s loss in the ratio of 2:1:1 (Dr.)
|
1,730
|
865
|
865
|
(Loss)
|
|
|
(Dr.) 260
|
(Cr.) 375
|
(Dr.) 115
|
|
Adjustment Entry :—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
A’s Capital A/c Dr.
C’s Capital A/c Dr.
To B’s Capital A/c
(Adjustment on account of the omissions of the interest on Capitals and Drawings in the accounts)
|
|
260
115
|
375
|
SOLUTION : 54 (C).
|
|
A
|
B
|
|
|
`
|
`
|
|
Closing Capitals
|
2,00,000
|
1,50,000
|
|
Less : Share of Profit
|
45,000
|
30,000
|
|
|
1,55,000
|
1,20,000
|
|
Add: Drawings
|
24,000
|
24,000
|
|
Opening Capitals
|
1,79,000
|
1,44,000
|
NET EFFECT ON CAPITAL ACCOUNTS
|
Particulars
|
A
|
B
|
Firm
|
|
Interest on Opening Capitals (Cr.)
Division of firm’s loss in the ratio of 3 : 2 (Dr.)
|
`
14,320
15,504
|
`
11,520
10,336
|
25,840
(Loss)
|
|
(Dr.) 1,184
|
(Cr.) 1,184
|
Adjustment Entry :—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2011
March 31
|
A’s Capital A/c
To B’s Capital A/c
(Adjustment for omission of interest on Capitals)
|
Dr.
|
|
1,184
|
1,184
|
|
|
|
|
|
|
SOLUTION : 55 (A).
Assuming the Capitals are fixed in Q. 54 (A):
Mohan Vijay Anil
` ` `
Interest on Capital @ 10% p.a. 3,000 2,500 2,000
STATEMENT SHOWING THE ADJUSTMENT TO BE MADE
|
Particulars
|
Mohan
|
Vijay
|
Anil
|
Finn
|
|
|
`
|
`
|
`
|
`
|
|
Interest on Capitals
|
3,000
|
2,500
|
2,000
|
|
|
Less : Interest on drawings
|
250
|
200
|
150
|
|
|
(Cr.)
|
2,750
|
2,300
|
1,850
|
6,900
|
|
Division of firm’s loss in profit sharing ratio
|
|
|
|
(Loss)
|
|
i.e., equally (Dr.)
|
2,300
|
2,300
|
2,300
|
|
|
|
(Cr.) 450
|
|
(Dr.) 450
|
|
Adjustment Entry :—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2011
March 31
|
Anil’s Current A/c Dr.
To Mohan’s Current A/c
(Adjustment on account of omission of the interest on capitals and drawings in the accounts)
|
|
450
|
450
|
SOLUTION : 55 (B).
Assuming the Capitals are fixed in Q. 54 (B):
|
|
A
|
B
|
C
|
|
|
`
|
`
|
`
|
|
Interest on Capital @ 10% p.a.
|
2,000
|
1,500
|
1,000
|
STATEMENT SHOWING THE ADJUSTMENT TO BE MADE
|
Particulars
|
A
|
B
|
C
|
Firm
|
|
|
`
|
`
|
`
|
`
|
|
Interest on Capitals
|
2,000
|
1,500
|
1,000
|
|
|
Less : Interest on drawings
|
130
|
90
|
50
|
|
|
(Cr.)
|
1,870
|
1,410
|
950
|
4,230
|
|
Division of firm’s loss in the ratio of 2:1:1 (Dr.)
|
2,115
|
1057.50
|
1057.50
|
(Loss)
|
|
|
(Dr.)
245
|
(Cr.)
352.50
|
(Dr.)
107.50
|
|
Adjustment Entry :—
|
Date
|
Particulars
|
L.F.
|
Dr.(`)
|
Cr.(`)
|
|
|
A’s Current A/c Dr.
C’s Current A/c Dr.
To B’s Current A/c
(Adjustment on account of omission of the interest on capitals and drawings in the accounts)
|
|
245.00
107.50
|
352.50
|
SOLUTION : 55 (C).
Assuming the Capitals are fixed in Q. 54 (C):
A B
` `
Interest on Capital @ 8% p.a. 16,000 12,000
STATEMENT SHOWING THE ADJUSTMENT TO BE MADE
|
Particulars
|
A
|
B
|
Firm
|
|
Interest on Capitals (Cr.)
|
`
16,000
|
`
12,000
|
`
28,000
|
|
Division of firm’s loss in the profit sharing ratio i.e., 3 : 2 (Dr.)
|
16,800 (Dr.) 800
|
11,200 (Cr.) 800
|
(Loss)
|
Adjustment Entry :—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2011
March 31
|
A’s Current A/c Dr.
To B’s Current A/c
(Adjustment on account of the omission of interest on Capitals)
|
|
800
|
800
|
SOLUTION : 56.
Calculation of Interest on Capital:
For the calculation of interest on capital, Opening Capital has to be ascertained:
|
Particulars
|
Esha
|
Manav
|
Daman
|
|
|
`
|
`
|
`
|
|
Closing Capital
Add: Drawings already debited
|
3,20,000
48,000
|
2,40,000
48,000
|
1,60,000
60,000
|
|
|
3,68,000
|
2,88,000
|
2,20,000
|
|
Less : Profit already credited
|
45,000
|
30,000
|
15,000
|
|
Opening Capital
|
3,23,000
|
2,58,000
|
2,05,000
|
|
Interest on Capital @10% p.a.
|
3,23,000 x 10/100 = 32,300
|
2,58,000 x 10/100
= 25,800
|
2,05,000 x 10/100
= 20,500
|
Total Interest on Capital = `32,300 + `25,800 – `20,500 = `78,600
Calculation of Interest on Drawings:
Esha and Manav each withdrew a sum of `48,000 in equal installments in the middle of every month. Hence interest on drawings will be charged for 6 months:
48,000 x 6/12 x 5/100 = `1,200 each
Interest on Daman’s Drawings = `60,000 x 6/12 x 5/100 = `1,500
(Date of Drawings is not given, hence interest will be charged for 6 months)
TABLE SHOWING ADJUSTMENTS
|
Particulars
|
Esha
|
Manav
|
Daman
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest on Opening Capitals
|
32,300
|
25,800
|
20,500
|
78,600
|
|
Less : Interest on Drawings
|
1,200
|
1,200
|
1,500
|
3,900
|
|
Balance (Cr.)
|
31,100
|
24,600
|
19,000
|
74,700
|
|
Division of Firm’s Loss of `74,700
in the ratio of 3 : 2 : 1 (Dr.)
|
37,350
|
24,900
|
12,450
|
74,700
|
|
|
Dr. 6,250
|
Dr. 300
|
Cr. 6,550
|
—
|
RECTIFYING ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
Esha’s Capital A/c
Manav’s Capital A/c
To Daman’s Capital A/c
(Interest on capital and interest on drawings omitted now adjusted)
|
Dr.
Dr.
|
|
6,250
300
|
6,550
|
|
|
|
|
|
|
SOLUTION : 57.
Interest on capital should always be calculated on the opening capitals.
CALCULATION OF OPENING CAPITALS
|
|
A
|
B
|
|
|
`
|
`
|
|
Closing Capitals (as on 31 -3-2016)
|
6,00,000
|
4,00,000
|
|
Less : Share of Profit (^4,50,000 in the ratio of 2 : 1)
|
3,00,000
|
1,50,000
|
|
|
3,00,000
|
2,50,000
|
|
Add: Drawings
|
1,00,000
|
50,000
|
|
Opening Capitals (as on 1-4-2015)
|
4,00,000
|
3,00,000
|
TABLE SHOWING ADJUSTMENT
|
Particulars
|
|
A
|
B
|
Total
|
|
|
|
`
|
`
|
`
|
|
Interest on Opening Capitals @ 9% p.a.
Less : Interest on Drawings @ 12% p.a.
|
|
36,000
|
27,000
|
63,000
|
|
for six months
|
|
6,000
|
3,000
|
9,000
|
|
Balance
Division of Firm’s loss of `54,000 in the
|
(Cr.)
|
30,000
|
24,000
|
54,000
|
|
ratio of 2 : 1
|
(Dr.)
|
36,000
(Dr.) 6,000
|
18,000
(Cr.) 6,000
|
|
Adjustment Entry:—
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016 March 31
|
A’s Capital A/c Dr.
To B’s Capital A/c
(Interest on Capital and interest on drawings not charged, now adjusted)
|
|
6,000
|
6,000
|
In the Absence of Partnership Deed
SOLUTION : 58.
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2017 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Profit:
A 1,07,100x 1/2 53,550
B 1,07,100x 1/2 53,550
|
1,07,100
|
By Profit for the year 1,08,300
Less : Interest on A’s
loan 6% p.a. 1,200*
|
1,07,100
|
|
1,07,100
|
1,07,100
|
* If interest @ 15% is `3,000
interest @ 6% will be x 6 = `1,200
Guarantee of Minimum Share of Profit
SOLUTION: 59 (A).
STATEMENT SHOWING APPROPRIATION OF PROFITS
|
|
A
|
B
|
C
|
|
|
`
|
`
|
`
|
|
Share of Profit `10,50,000 in the ratio (4:2: 1)
Less : Contribution to C from A and B of the amount
|
6,00,000
|
3,00,000
|
1,50,000
|
|
which fell short of Minimum Guarantee Amount i.e., 1,80,000 – 1,50,000 = `30,000 in the ratio of 4 : 2 or 2 : 1
|
(-)20,000
|
(-) 10,000
|
(+) 20,000
(+) 10,000
|
|
|
5,80,000
|
2,90,000
|
1,80,000
|
SOLUTION : 59 (B).
PROFIT AND LOSS APPROPRIATION ACCOUNT
for the year ended
|
Dr.
|
|
|
|
|
Cr.
|
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
|
|
|
By Profit & Loss A/c
|
|
5,12,000
|
|
A
|
|
64,000
|
|
|
|
|
|
|
B
|
|
48,000
|
|
|
|
|
|
|
C
|
|
40,000
|
1,52,000
|
|
|
|
|
|
To Profit transferred )
|
|
|
|
|
|
|
|
A’s Capital A/c 1,56,000
B’s Capital A/c 1,04,000
C’s Capital A/c 1,00,000
|
3,60,000
|
|
|
|
|
|
|
|
|
5,12,000
|
|
|
|
5,12,000
|
Working Notes (1):
|
|
A
|
B
|
C
|
|
|
`
|
`
|
`
|
|
Share of Profit `3,60,000 in the ratio 3:2:1
Less : Contribution to C from A and B of the amount which fell short of Minimum Guarantee Amount i.e., 1,00,000 – 60,000= `40,000 in the ratio of 3 : 2
|
1,80,000
|
1,20,000
|
60,000
|
|
(-) 24,000
|
(-) 16,000
|
(+) 24,000 (+) 16,000
|
|
|
1,56,000
|
1,04,000
|
1,00,000
|
SOLUTION : 60 (A).
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. For the year ending 31st March, 2015 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Profit transferred to :
|
|
By Profit & Loss A/c
|
30,000
|
|
A’s Capital A/c (15,000 – 5,000)
|
10,000
|
|
|
|
B’s Capital A/c
|
10,000
|
|
|
|
C’s Capital A/c (5,000 + 5,000)
|
10,000
|
|
|
|
|
30,000
|
|
30,000
|
Working Note:
|
Share of Profit = A :
|
`30,000 x 3/6 =
|
`15,000
|
|
B :
|
`30,000 x 2/6 =
|
`10,000
|
|
C :
|
`30,000 x 1/6 =
|
`5,000
|
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. For the year ending 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Profit transferred to :
|
|
By Profit & Loss A/c
|
90,000
|
|
A’s Capital A/c (90,000 x 3/6)
|
45,000
|
|
|
|
B’s Capital A/c (90,000 x 2/6)
|
30,000
|
|
|
|
C’s Capital A/c (90,000 x 1/6)
|
15,000
|
|
|
|
|
90,000
|
|
90,000
|
SOLUTION : 60 (B).
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended Cr.
|
Particulars –
|
`
|
Particulars
|
`
|
|
To Interest on Capitals @ 8% p.a.
X 32,000
Y 24,000
Z 16,000
To Profit transferred to Capital A/cs :
X 90,000 – 20,000 = 70,000
Y = 60,000
Z 30,000 + 20,000 = 50,000
|
72,000
1,80,000
|
By Profit & Loss A/c
|
2,52,000
|
|
2,52,000
|
2,52,000
|
Working Note:
Net Profit after Interest on Capital = 2,52,000 – 72,000 = `1,80,000
|
Share of Profit = X :
|
`1,80,000 x 2/6
|
= `90,000
|
|
Y :
|
`1,80,000 x 2/6
|
= `60,000
|
|
Z :
|
`1,80,000 x 1/6
|
= `30,000
|
The minimum guaranteed amount to Z is `50,000 whereas his share of profit amounts to `30,000. Hence, the deficiency of `20,000 will be deducted from A’s share and will be added to Z’s share.
Dr. CAPITAL ACCOUNTS Cr.
|
Particulars
|
X
|
Y
|
Z
|
Particulars
|
X
|
Y
|
Z
|
|
|
`
|
`
|
`
|
|
`
|
`
|
`
|
|
To Drawings
|
50,000
|
40,000
|
35,000
|
By Balance b/d
|
4,00,000
|
3,00,000
|
2,00,000
|
|
To Balance c/d
|
4,52,000
|
3,44,000
|
2,31,000
|
By Interest on
|
|
|
|
|
|
|
|
|
Capital
|
32,000
|
24,000
|
16,000
|
|
|
|
|
|
By P&L
|
|
|
|
|
|
|
|
|
Appro-
|
|
|
|
|
|
|
|
|
priation A/c
|
70,000
|
60,000
|
50,000
|
|
|
5,02,000
|
3,84,000
|
2,66,000
|
|
5,02,000
|
3,84,000
|
2,66,000
|
SOLUTION : 61.
JOURNAL
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016
|
|
|
|
|
|
|
March 31
|
Profit & Loss A/c
|
Dr.
|
|
6,50,000
|
|
|
|
To Profit & Loss Appropriation A/c
|
|
|
|
6,50,000
|
|
|
(Transfer of profits)
|
|
|
|
|
|
March 31
|
Profit & Loss Appropriation A/c
|
Dr.
|
|
6,50,000
|
|
|
|
To S’s Capital A/c
|
|
|
|
2,55,000
|
|
|
To T’s Capital A/c
|
|
|
|
1,90,000
|
|
|
To W’s Capital A/c
|
|
|
|
1,25,000
|
|
|
To X’s Capital A/c
|
|
|
|
80,000
|
|
|
(Profits distributed as per working note)
|
|
|
|
|
Working Note:
|
Share of Profit = S :
|
`6,50,000 x 4/10
|
= `2,60,000
|
|
T :
|
`6,50,000 x 3/10
|
= `1,95,000
|
|
W :
|
`6,50,000 x 2/10
|
= `1,30,000
|
|
X :
|
`6,50,000 x 1/10
|
= `65,000
|
X’s share in profits amounts to `65,000 whereas the minimum guarantee amount is
`80,000. Hence, the deficiency of `15,000 will be met by S, T, W equally i.e. `5,000 each.
As such,
|
S’ s share
|
= 2,60,000 –
|
5,000
|
= ?2,55,000
|
|
T s share
|
= 1,95,000 –
|
5,000
|
= ? 1,90,000
|
|
JFs share
|
= 1,30,000-
|
5,000
|
= ? 1,25,000
|
|
X’s share
|
= 65,000 +
|
15,000
|
= ? 80,000
|
SOLUTION : 62.
Profit & Loss Appropriation Account of Vikas, Vivek and Vandana
Dr. for the year ended 31st March, 2015 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Partners’ Capital A/cs
|
|
By Profit & Loss A/c
|
|
|
(transfer of Profit)
Vikas’s Capital A/c 4,72,500
Less : Deficiency 15,000
|
4,57,500
|
(Net Profit)
|
9,00,000
|
|
Vivek’s Capital A/c 3,15,000
Less: Deficiency 22,500
Vandana’s Capital A/c 1,12,500
Add: from Vikas 15,000
|
2,92,500
|
|
|
|
from Vivek 22,500
|
1,50,000
|
|
|
|
|
9,00,000
|
|
9,00,000
|
|
Profit of the Firm
|
`
9,00,000
|
|
Vandana’s share of Profit = `9,00,000 x 1/8
|
1,12,500
|
|
Balance to be divided between Vikas and Vivek
|
7,87,500
|
|
Vikas’s share of Profit = `7,87,500 x 3/5
|
4,72,500
|
|
Vivek’s share of Profit = `7,87,500 x 2/5
|
3,15,000
|
Vandana’s deficiency = `1,50,000 – `1,12,500 = 37,500. Which is to be contributed by Vikas & Vivek in the ratio 2:3, i.e., Vikas will contribute `15,000 and Vivek will contribute `22,500
SOLUTION : 63.
STATEMENT SHOWING DISTRIBUTION OF PROFIT
|
Particulars
|
Ram
|
Mohan
|
Sohan
|
Rakesh
|
|
|
`
|
`
|
|
`
|
`
|
|
Share of Profit (4 : 3 : 2 : 1)
Less : Contribution to Rakesh from Ram and
|
1,60,000
|
1,20,000
|
|
80,000
|
40,000
|
|
Mohan of the amount which fell short of
Minimum Guarantee Amount i.e.,
`70,000 – `40,000 = `30,000 in the ratio of 2 : 1
|
(-) 20,000
|
(-) 10,000
|
|
|
+20,000
+10,000
|
|
Total
|
1,40,000
|
1,10,000
|
80,000
|
70,000
|
SOLUTION : 64.
JOURNAL
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2015
|
|
|
|
|
|
|
March 31
|
X’s Capital A/c
|
Dr.
|
|
60,000
|
|
|
|
Y’s Capital A/c
|
Dr.
|
|
30,000
|
|
|
|
Z’s Capital A/c
|
Dr.
|
|
30,000
|
|
|
|
To Profit and Loss A/c
|
|
|
|
1,20,000
|
|
|
(Loss divided among partners as per working note)
|
|
|
|
|
|
X’s Capital A/c
|
Dr.
|
|
78,000
|
|
|
|
Y’s Capital A/c
|
Dr.
|
|
52,000
|
|
|
|
To Z’s Capital A/c
|
|
|
|
1,30,000
|
|
|
(Deficiency of Z’s share of profit met by X and Y in
|
|
|
|
|
|
|
3:2)
|
|
|
|
|
Working Notes:
|
(i) Z’s share of Loss =
|
`1,20,000 x 1/4
|
= `30,000
|
|
Remaining Loss =
|
`1,20,000 – `30,000
|
= `90,000
|
|
X’s share of Loss =
|
`90,000 x 2/3
|
= `60,000
|
|
Y’s share of Loss =
|
`90,000 x 1/3
|
= `30,000
|
(ii) Z is guaranteed minimum profit of `1,00,000 whereas share of loss debited to his capital account is `30,000. Hence he will be credited by `1,30,000 borne by X and Fin 3 : 2.
SOLUTION : 65.
PROFIT AND LOSS ACCOUNT
Dr. for the year ending on 31st March, 2015 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Loss before Interest
|
85,000
|
By Net Loss Transferred to
|
|
|
To Interest on A’s Loan
|
|
A’s Capital A/c
|
40,000
|
|
|
(for 10 months)
|
5,000
|
B’s Capital A/c
|
30,000
|
|
|
|
|
C’s Capital A/c
|
20,000
|
90,000
|
|
|
90,000
|
|
|
90,000
|
JOURNAL
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2015 March 31
|
Interest on A’s Loan A/c
To A’s Loan A/c
(Interest provided on A’s Loan to the firm)
|
Dr.
|
|
5,000
|
5,000
|
|
|
Profit & Loss A/c
To Interest on A’s Loan A/c
(Interest on loan charged to Profit & Loss A/c)
|
Dr.
|
|
5,000
|
5,000
|
|
|
A’s Capital A/c Dr.
B’s Capital A/c Dr.
C’s Capital A/c Dr.
To Profit & Loss A/c
(Loss of `90,000 divided among the partners in 4:3:2)
|
|
40,000
30,000
20,000
|
90,000
|
|
|
A’s Capital A/c Dr.
C’s Capital A/c Dr.
To B’s Capital A/c
(Deficiency of B’s share of profit met by A and C in their profit sharing ratio of 4 : 2)
|
|
1,20,000
60,000
|
1,80,000
|
Working Note :
C is guaranteed a minimum profit of `1,50,000 whereas share of loss debited to his capital account is `30,000. Hence he will be credited by `1,80,000 (i.e. 1,50,000 + 30,000) borne by A and C in their profit sharing ratio of 4 : 2)
SOLUTION : 66.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March. 2012 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital
|
|
|
By Profit & Loss A/c
|
|
|
Ali
|
40,000
|
|
(Net Profit)
|
2,00,000
|
|
Bimal
|
30,000
|
|
|
|
|
Deepak
|
20,000
|
90,000
|
|
|
|
To Salary :
|
|
|
|
|
|
Bimal
|
24,000
|
|
|
|
|
Deepak
|
12,000
|
36,000
|
|
|
|
To Balance c/d
|
|
74,000
|
|
|
|
|
|
2,00,000
|
|
2,00,000
|
|
To Net Profit transferred to
|
|
By Balance b/d
|
74,000
|
|
Ali’s Capital A/c
|
|
|
|
|
|
(`74,000 x 5/10)
|
|
37,000
|
|
|
|
Bimal’s Capital A/c
|
|
|
|
|
|
(`74,000 x 3/10)
|
22,200
|
|
|
|
|
Add: Transferred from
|
|
|
|
|
|
Deepak
|
3,800
|
26,000
|
|
|
|
Deepak’s Capital A/c
|
|
|
|
|
|
(`74,000×2/10)
|
14,800
|
|
|
|
|
Less : Transferred to Bimal 3,800
|
|
|
|
|
|
|
11,000
|
|
|
|
|
|
74,000
|
|
74,000
|
|
|
|
|
|
|
Working Notes:
(i) Bimal’s Share of Profit = `74,000 x 3/10 = `22,200.
(ii) Bimal’s Share of Profit + Salary = `22,200 + `24,000 = `46,200
(iii) Guaranteed Amount = `50,000.
(iv) Deficiency to be borne by Deepak = `50,000 – `46,200 = `3,800
SOLUTION : 67.
PROFIT AND LOSS APPROPRIATION A/C
Dr. for the year ending 31st March, 2017 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Ajoo’s Capital A/c
52,000 x 4/5 = 41,600
Less : Given to Sajoo 2,125
|
|
By Profit & Loss A/c
|
57,000
|
|
39,475
|
|
|
|
To Bajoo’s Capital A/c
52,000 x 1/5
|
10,400
|
|
|
|
|
|
|
To Sajoo’s Capital A/c
|
7,125
|
|
|
|
|
|
57,000
|
|
57,000
|
|
|
|
|
|
`
Profit before Sajoo’s Salary and Commission 57,000
Less: Salary 2,400
54,600
Less : Sajoo’s Commission 5/105 of `54,600 2,600
52,000
Thus Sajoo as a manager will receive `
Salary `2,400 + Commission `2,600 5,000
Sajoo as a partner will receive 57,000 x 1/8 7,125
Excess received by Sajoo as a partner 2,125
This excess amount of `2,125 will be deducted from Ajoo’s Share.
SOLUTION : 68.
PROFIT AND LOSS APPROPRIATION /VC
Dr. for the year ended 31st March, 2017 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To P’s Capital A/c
4/7 of 3,50,000 2,00,000
Less: 3/5 of 12,500 7,500
|
|
By Profit & Loss A/c
3,85,000
|
|
|
1,92,500
|
Add: R’s Salary 20,000
|
4,05,000
|
|
To Q’ s Capital A/c
3/7 of 3,50,000 1,50,000
Less : 2/5 of 12,500 5,000
|
|
|
|
|
1,45,000
|
|
|
|
To R’s Capital A/c
|
67,500
|
|
|
|
|
4,05,000
|
|
4,05,000
|
|
Profit before R’s Salary and Commission
|
4,05,000
|
|
Less : Salary to R
|
20,000
|
|
|
3,85,000
|
|
Less: Commission 10/110 of `3,85,000
|
35,000
|
|
|
3,50,000
|
|
Thus R as a manager will receive : Salary `20,000 + Commission `35,000
|
55,000
|
|
R as a partner will receive 4,05,000 x 1/6
|
67,500
|
|
Excess received by R as a partner
|
12,500
|
|
|
|
This excess amount of `12,500 will be deducted from P and Q’s share in the ratio of 3 : 2 respectively.
ADDITIONAL QUESTIONS
SOLUTION : 69.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2015 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
Particulars
|
|
To General Reserve A/c
|
49,775
|
By Profit & Loss A/c
|
5,00,000
|
|
|
To Interest on Capital:
Shankar’s Current A/c 25,000
Manu’s Current A/c 40,000
To Profit transferred to :
Shankar’s Current A/c 2,31,945
Manu’s Current A/c 1,54,630
|
|
Less : Interest on Loan
By Interest on Drawings
|
2,250
|
4,97,750
|
|
65,000
|
Shankar’s Current A/c 1,800
|
|
|
3,86,575
5,01,350
|
Manu’s Current A/c
|
1,800
|
3,600
5,01,350
|
Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
|
Date
|
Particulars
|
Shankar
|
Manu
|
Date
|
Particulars
|
Shankar
|
Manu
|
|
2015
|
|
`
|
`
|
2014
|
|
`
|
`
|
|
Mar. 31
|
To Bal. c/d
|
4,00,000
|
4,00,000
|
Apr. 1
|
By Bal. b/d
|
2,00,000
|
4,00,000
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
Jan. 1
|
By Bank A/c
|
2,00,000
|
|
|
|
|
4,00,000
|
4,00,000
|
|
|
4,00,000
|
4,00,000
|
|
Dr.
|
|
PARTNERS’ CURRENT ACCOUNTS
|
|
Cr.
|
|
Date
|
Particulars
|
Shankar
|
Manu
|
Date
|
Particulars
|
Shankar
|
Manu
|
|
2015
|
|
`
|
`
|
2014
|
|
`
|
`
|
|
Mar. 31
|
To Drawings
|
24,000
|
24,000
|
Apr. 1
|
By Balance b/d
|
50,000
|
1,00,000
|
|
Mar. 31
|
To Interest on
|
|
|
2015
|
|
|
|
|
|
Drawings
|
1,800
|
1,800
|
Mar. 31
|
By Interest on
|
|
|
|
Mar. 31
|
To Bal. c/d
|
2,81,145
|
2,68,830
|
|
Capital
|
25,000
|
40,000
|
|
|
|
|
|
|
By Profit &
|
|
|
|
|
|
|
|
|
Loss Appro-
|
|
|
|
|
|
|
|
|
priation A/c
|
2,31,945
|
1,54,630
|
|
|
|
3,06,945
|
2,94,630
|
|
|
3,06,945
|
2,94,630
|
|
Dr.
|
|
MANU’S LOAN’S ACCOUNT
|
Cr.
|
|
Date
|
Particulars
|
`
|
Date
|
Particulars
|
`
|
|
2015
|
|
|
|
2015
|
|
|
|
|
Mar. 31
|
To Balance c/d
|
|
1,52,250
|
Jan. 1
|
By Bank A/c
|
|
1,50,000
|
|
|
|
|
|
Mar. 31
|
By Interest on Loan A/c
|
2,250
|
|
|
|
|
1,52,250
|
|
|
|
1,52,250
|
Working Note:
Interest on Drawings:
Since drawings are made at the beginning of each quarter, interest will be charged for 7.5 months: 24,000 x 12/100 x 7.5/12 = `1,800
Interest on Loan will be allowed @6% p.a.
SOLUTION: 70.
Following values were considered by Ram, Mohan and Rakhi while preparing the new Partnership Deed:
- Sensitivity towards differently abled people.
- Development of naxal affected areas by providing entrepreneurial opportunities.
- Upliftment of girls belonging to Scheduled Castes and Scheduled Tribes by providing employment.
- Fulfilment of social responsibility.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2012 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Prime Minister’s Relief Fund
To National Blind Relief Fund
|
1,00,000
50,000
|
By Profit and Loss A/c (Trading Profit)
|
10,00,000
|
|
To Net Profit transferred to :
Ram’ Capital A/c 2,83,334
Mohan’s Capital A/c 2,83,333
Rakhi Capital A/c 2,83,333
|
8,50,000
|
|
|
|
10,00,000
|
|
10,00,000
|
SOLUTION : 71.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2016 Cr.
|
Particulars
|
|
`
|
Particulars
|
|
`
|
|
To Interest on Capital:
D
E
|
50,000
70,000
|
|
By Profit & Loss A/c By Interest on Drawings :
D
|
4,400
|
3,50,000
|
|
F
To Salary to F
To Profit transferred to
|
80,000
|
2,00,000
1,20,000
|
E
|
4,500
|
8,900
|
|
Capital A/cs :
D 5/20
E 7/20
F 8/20
|
9,725
13,615
15,560
|
38,900
|
|
|
|
|
|
3,58,900
|
|
3,58,900
|
SOLUTION : 72.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Salary :
|
|
|
By Profit & Loss A/c
|
|
|
|
|
Simmi
|
12,000
|
|
(Profit for the year)
|
|
1,50,000
|
|
|
Sonu
|
9,000
|
21,000
|
By Interest on Drawings
|
|
|
|
To Interest on Capitals :
|
|
|
|
Simmi
|
600
|
|
|
|
Simmi
|
1,500
|
|
|
Sonu
|
450
|
1,050
|
|
|
Sonu
|
3,000
|
4,500
|
|
|
|
|
|
To Profit transferred to
|
|
|
|
|
|
|
|
Current Accounts:
|
|
|
|
|
|
|
|
|
Simmi
|
94,163
|
|
|
|
|
|
|
|
Sonu
|
31,387
|
1,25,550
|
|
|
|
|
|
|
|
|
1,51,050
|
|
|
|
1,51,050
|
|
Dr.
|
|
PARTNER’S CURRENT ACCOUNT
|
|
Cr.
|
|
Date
|
Particulars
|
Simmi
|
Sonu
|
Date
|
Particulars
|
Simmi
|
Sonu
|
|
2016
|
|
`
|
`
|
2015
April 1
|
|
`
|
`
|
|
March 31
|
To Drawings
|
20,000
|
15,000
|
By Balance b/d
|
30,000
|
15,000
|
|
March 31
|
To Interest on
Drawings
|
600
|
450
|
2016
|
|
|
|
|
|
March 31
|
By Salary
|
12,000
|
9,000
|
|
March 31
|
To Balance c/d
|
1,17,063
|
42,937
|
March 31
|
By Interest on
Capital
|
1,500
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
By Profit & Loss Appropriation A/c
|
94,163
|
31,387
|
|
|
|
1,37,663
|
58,387
|
|
|
1,37,663
|
58,387
|
SOLUTION : 73.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ending on March 31, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
|
`
|
|
To Salary to Pappu
(2,500 x 12)
To Commission to Munna
|
30,000
10,000
|
By Profit & Loss A/c (Profit for the year)
|
|
90,575
|
|
To Interest on Capital :
Pappu 10,000
Munna 7,500
|
17,500
|
By Interest on Drawings
Pappu
Munna
|
1,250
425
|
1,675
|
|
To Profit transferred to :
Pappu’s Current A/c 20,850 Munna’s Current A/c 13,900
|
34,750
92,250
|
|
|
92,250
|
SOLUTION : 74.
|
|
|
A
|
B
|
C
|
|
|
|
`
|
`
|
`
|
|
(i)
|
`56,000 Ratio 5:3:2
|
28,000
|
16,800
|
11,200
|
|
(ii)
|
First `1,00,000
|
50,000
|
30,000
|
20,000
|
|
|
Balance `1,56,000
|
52,000
|
52,000
|
52,000
|
|
|
Total Profit
|
1,02,000
|
82,000
|
72,000
|
SOLUTION : 75.
PROFIT AND LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital (at 6% p.a.)
|
|
By Profit & Loss A/c
|
|
|
A : on `1,00,000 6,000
B : on ` 1,00,000 6,000
C : on `2,00,000 12,000
|
24,000
|
(Net Profit as per P & L A/c)
|
2,70,000
|
|
To Salary (A)
To Profit transferred to :
|
60,000
|
|
|
|
A’s Current A/c 50,000
B’s Current A/c 54,000
C’s Current A/c 82,000
|
1,86,000
|
|
|
|
|
2,70,000
|
|
2,70,000
|
JOURNAL ENTRY (For Appropriation of Profit)
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014
March 31
|
Profit & Loss Appropriation A/c Dr.
To A’s Current A/c
To B’s Current A/c
To C’s Current A/c
(Profit transferred to current accounts)
|
|
1,86,000
|
50,000
54,000
82,000
|
Working Note: Profit after Interest on capital and Salary :
`2,70,000 – `24,000 – `60,000 = `1,86,000
|
|
First `40,000 in Capital Ratio i.e. 2:3:5
|
A(`)
8,000
|
B(`)
12,000
|
C(`)
20,000
|
|
|
Next `80,000 in Capital Ratio i.e. 1:1:2
|
20,000
|
20,000
|
40,000
|
|
|
Remaining `66,000 equally
|
22,000
|
22,000
|
22,000
|
|
|
|
50,000
|
54,000
|
82,000
|
SOLUTION: 76.
Dr. CAPITAL ACCOUNTS Cr.
|
Date
|
Particulars
|
X
|
Y
|
Z
|
Date
|
Particulars
|
X
|
Y
|
Z
|
|
2016
|
|
`
|
`
|
`
|
2015
|
|
`
|
`
|
`
|
|
Mar. 31
|
To Dra-
|
|
|
|
April 1
|
By Bal. b/d
|
2,00,000
|
1,20,000
|
1,00,000
|
|
|
wings
To Bal.
|
8,000
|
8,000
|
8,000
|
2016
|
|
|
c/d
|
2,62,000
|
1,98,000
|
1,62,000
|
Mar. 31
|
By Salary
By Interest on Capital
By P&L Appropriation A/c
|
—
|
25,000
|
20,000
|
|
|
|
|
|
|
|
10,000
|
6,000
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(X = 40,000 + 20,000)
|
60,000
|
|
|
|
|
|
|
|
|
|
(Y = 35,000 + 20,000)
|
|
55,000
|
|
|
|
|
|
|
|
|
(Z = 25,000 + 20,000)
|
|
|
45,000
|
|
|
|
2,70,000
|
2,06,000
|
1,70,000
|
|
|
2,70,000
|
2,06,000
|
1,70,000
|
Working Notes :
P & L APPROPRIATION ACCOUNT
Dr. for the year ending on 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital:
|
|
|
By Profit & Loss A/c
|
|
|
X
|
10,000
|
|
— being profit
|
1,81,000
|
|
Y
|
6,000
|
|
|
|
|
Z
|
5,000
|
21,000
|
|
|
|
To Profit transferred to
|
|
|
|
|
|
First 1,00,000
|
|
|
|
|
|
X 40%
|
40,000
|
|
|
|
|
Y 35%
|
35,000
|
|
|
|
|
Z 25%
|
25,000
|
1,00,000
|
|
|
|
Balance 60,000 equally
|
|
|
|
|
|
X
|
20,000
|
|
|
|
|
Y
|
20,000
|
|
|
|
|
Z
|
20,000
|
60,000
|
|
|
|
|
|
1,81,000
|
|
1,81,000
|
SOLUTION : 77.
PROFIT AND LOSS ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Manager’s Commission
(10% of ?3,00,000)
To Net Profit transferred to
P & L Appropriation A/c
|
30,000
2,70,000
|
By Profit for the year
(before Tulsi’s salary)
2,28,000 + 72,000
|
3,00,000
|
|
3,00,000
|
3,00,000
|
P & L APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Tulsi’s Salary
To Interest on Capital :
|
|
72,000
|
By Profit & Loss A/c
|
2,70,000
|
|
Tulsi
|
48,000
|
|
|
|
|
Kabir
|
36,000
|
84,000
|
|
|
|
To Profit Transferred to
Capital A/cs :
|
|
|
|
|
|
|
|
|
|
|
Tulsi 3/5
|
68,400
|
|
|
|
|
Kabir 2/5
|
45,600
|
1,14,000
|
|
|
|
|
|
2,70,000
|
|
2,70,000
|
SOLUTION : 78.
A’s commission (before charging such commission) = 55,000 x 10/100 = `5,500
B’s commission (after charging A’s commission and his own commission)
= (55,000 – 5,500) x 10/110 = `4,500
SOLUTION : 79.
P & L APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
A 6,800
B 3,800
To Profit transferred:
A’s Current A/c 15,240
B’s Current A/c 10,160
|
10,600
25,400
|
By Profit & Loss A/c 40,000 Less: Manager’s Commission
10% on 40,000 4,000
|
36,000
|
|
36,000
|
36,000
|
Dr. CAPITAL ACCOUNTS Cr.
|
Date
|
Particulars
|
A
|
B
|
Date
|
Particulars
|
A
|
B
|
|
2013
|
|
`
|
`
|
2013
|
|
`
|
`
|
|
July 1
|
To Bank
|
20,000
|
—
|
April 1
|
By Balance b/d
|
1,00,000
|
40,000
|
|
2014
|
|
|
|
July 1
|
By Bank
|
—
|
10,000
|
|
Mar. 31
|
To Balance c/d
|
80,000
|
50,000
|
|
|
|
|
|
|
|
1,00,000
|
50,000
|
|
|
1,00,000
|
50,000
|
|
Dr.
|
CURRENT ACCOUNTS
|
|
Cr.
|
|
Date
|
Particulars
|
A
|
B
|
Date
|
Particulars
|
A
|
B
|
|
2013
|
|
`
|
`
|
2013
|
|
`
|
`
|
|
April 1
|
To Balance b/d
|
—
|
3,200
|
April 1
|
By Balance b/d
|
8,420
|
—
|
|
2014
|
|
|
|
2014
|
|
|
|
|
Mar. 31
|
To Drawings
|
12,000
|
10,000
|
Mar. 31
|
By Interest on
|
|
|
|
Mar. 31
|
To Balance c/d
|
18,460
|
760
|
|
Capital(1)
|
6,800
|
3,800
|
|
|
|
|
|
Mar. 31
|
By P&L
|
|
|
|
|
|
|
|
|
Appropria-
|
|
|
|
|
|
|
|
|
tion A/c
|
15,240
|
10,160
|
|
|
|
30,460
|
13,960
|
|
|
30,460
|
13,960
|
Working Notes:
|
Calculation of Interest on Capital:
|
|
|
|
|
From 1.4.2013 to 30.6.2013
|
|
`
|
`
|
|
A
|
1,00,000 x 8/100 x 3/12
|
=
|
2,000
|
|
|
B
|
40,000 x 8/100 x 3/12
|
=
|
|
800
|
|
From 1.7.2013 to 31.3.2014
|
|
`
|
`
|
|
A
|
80,000 x 8/100 x 9/12
|
=
|
4,800
|
|
|
B
|
50,000 x 8/100 x 9/12
|
=
|
|
3,000
|
|
|
|
|
6,800
|
3,800
|
SOLUTION : 80.
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Salary to .4 (? 500 x 12)
|
6,000
|
By Balance b/d
|
|
35,700
|
|
To Commission to B
|
|
4,000
|
By Interest on Drawings
|
|
|
|
To Interest on Capital
|
|
|
|
A
|
225
|
|
|
|
A
|
2,400
|
|
|
B
|
75
|
300
|
|
|
B
|
1,200
|
3,600
|
|
|
|
|
|
To Profit transferred to
|
|
|
|
|
|
|
|
A’s Current A/c
|
13,440
|
|
|
|
|
|
|
B’s Current A/c
|
8,960
|
22,400
|
|
|
|
|
|
|
|
|
36,000
|
|
|
|
36,000
|
|
Dr.
|
|
CAPITAL ACCOUNTS
|
|
Cr.
|
|
Date
|
Particulars
|
A
|
B
|
Date
|
Particulars
|
A
|
B
|
|
2014
|
|
`
|
`
|
2013
|
|
`
|
`
|
|
Mar. 31
|
To Balance c/d
|
40,000
|
20,000
|
April 1
|
By Balance b/d
|
40,000
|
20,000
|
|
|
|
40,000
|
20,000
|
|
|
40,000
|
20,000
|
|
Dr.
|
|
CURRENT ACCOUNTS
|
|
Cr.
|
|
Date
|
Particulars
|
A
|
B
|
Date
|
Particulars
|
A
|
B
|
|
2014
|
|
`
|
`
|
2013
|
|
`
|
`
|
|
Mar. 31
|
To Drawings
|
5,000
|
2,000
|
April 1
|
By Balance b/d
|
16,000
|
12,000
|
|
Mar. 31
|
To Interest on
Drawings
|
225
|
75
|
2014
|
|
|
|
|
|
Mar. 31
|
By Salary’ to A
|
6,000
|
—
|
|
Mar. 31
|
To Balance c/d
|
32,615
|
24,085
|
Mar. 31
Mar. 31
Mar. 31
|
By Commission to B
By Interest on Capital
By P&L Appropriation A/c
|
2,400
13,440
|
4,000
1,200
8,960
|
|
|
|
37,840
|
26,160
|
|
|
37,840
|
26,160
|
SOLUTION: 81.
Calculation of Interest on Drawings:
Case (a). In this case interest will be charged for six months because it will be assumed that the drawings were made evenly throughout the year:
60,000 x 8/100 x 6/12 = `2,400
Case (b). In this case interest will be charged for 6.5 months as the drawings are made in the beginning of every month:
60,000 x 8/100 x 6.5/12 = `2,600
Case (c). In this case interest will be charged for 5.5 months as the drawings are made at the end of every month:
60,000 x 8/100 x 5.5/12 = `2,200
Case (d). In this case interest will be charged for 6 months as the drawings are made during i.e., middle of every month.
60,000 x 8/100 x 6/12 = `2,400
Case (e).
|
Date
|
Amount
`
|
Period
(Months upto
31st March, 2016)
|
Products
|
|
2015
|
|
|
|
|
June 1
|
10,000
|
10
|
1,00,000
|
|
August 31
|
12,000
|
7
|
84,000
|
|
November 1
|
16,000
|
5
|
80,000
|
|
December 31
|
13,000
|
3
|
39,000
|
|
2016
February 1
|
9,000
|
2
|
18,000
|
|
|
60,000
|
|
3,21,000
|
Interest = Total of Products x 8/100 x 1/12
= 3,21,000 x 8/100 x 1/12 = `2,140
SOLUTION : 82.
Average Period = (12 months + 3 months)/2 = 7.5 months.
Total Drawings for the year = `10,000 x 4 times in a year = `40,000
Interest on Drawings = `40,000 x 9/100 x 7.5/12 = `2,250.
SOLUTION : 83.
Average Period = (9 months + 0 month)/2 = 4.5 months.
Total Drawings for the year = `10,000 x 4 = `40,000
Interest on Drawings = `40,000 x 9/100 x 4.5/12 = `1,350.
SOLUTION : 84.
Since date of drawing is not given, it will be assumed that drawings are made during i.e. middle of each quarter.
Average Period = (10.5 months +1.5 months)/2 = 6 months.
Total Drawings for the year = `10,000 x 4 = `40,000
Interest on Drawings = `40,000 x 9/100 x 6/12 = `1,800.
SOLUTION : 85.
Average Period = (6 months +1 month)/2 = 3.5 months.
Total Drawings = `4,000 x 6 months = `24,000
Interest on Drawings = `24,000 x 9/100 x 3.5/12 = `630.
SOLUTION : 86.
Average Period = (5 months + 0 month)/2 = 2.5 months.
Total Drawings = `4,000 x 6 months = `24,000
Interest on Drawings = `24,000 x 9/100 x 2.5/12 = `450
SOLUTION : 87.
Since date of drawing is not given, it will be assumed that drawings are made in the middle of each month.
Average Period = (5.5 months + 0.5 month)/2 = 3 months.
Total Drawings = `4,000 x 6 months = `24,000
Interest on Drawings = `24,000 x 9/100 x 3/12 = `540
SOLUTION : 88.
P & L APPROPRIATION ACCOUNT
Dr. for the year ending on 31st March. 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
|
|
|
By Profit & Loss A/c
|
|
24,605
|
|
A
|
3,600
|
|
By Interest on Drawings :
|
|
|
|
B
|
1,800
|
|
A
|
140
|
|
|
C
|
1,200
|
6,600
|
B
|
165
|
|
|
To Salary’ to A
To Profit Transferred to
|
|
6,000
|
C
|
90
|
395
|
|
A
|
6,200
|
|
|
|
|
|
B
|
3,720
|
|
|
|
|
|
C
|
2,480
|
12,400
|
|
|
|
|
|
|
25,000
|
|
|
25,000
|
(i) When Capital are fixed:
Dr. CAPITAL ACCOUNTS Cr
|
Date
|
Particulars
|
A
|
B
|
C
|
Date
|
Particulars
|
A
|
B
|
C
|
|
2014
|
|
`
|
`
|
`
|
2013
|
|
`
|
`
|
`
|
|
Mar. 31
|
To Balance
|
|
|
|
April 1
|
By Balance
|
|
|
|
|
|
c/d
|
60,000
|
30,000
|
20,000
|
|
b/d
|
60,000
|
30,000
|
20,000
|
|
Dr.
|
|
CURRENT ACCOUNTS
|
|
Cr.
|
|
Date
|
Particulars
|
A
|
B
|
C
|
Date
|
Particulars
|
A
|
B
|
C
|
|
2013
|
|
`
|
`
|
`
|
2014
|
|
`
|
`
|
`
|
|
June 1
|
To Dra-
|
|
|
|
Mar. 31
|
By Interest
|
|
|
|
|
|
wings
|
2,000
|
2,000
|
1,000
|
|
on
|
|
|
|
|
Oct. 1
|
To Dra-
|
|
|
|
|
Capital
|
3,600
|
1,800
|
1,200
|
|
|
wings
|
1,000
|
1,500
|
1,000
|
Mar. 31
|
By Salary
|
6,000
|
|
|
|
Dec. 1
|
To Dra-
|
|
|
|
Mar. 31
|
By P & L
|
|
|
|
|
|
wings
|
500
|
1,000
|
500
|
|
Appropria-
|
|
|
|
|
2014
|
|
|
|
|
|
tion A/c
|
6,200
|
3,720
|
2,480
|
|
Mar. 31
|
To Interest
|
|
|
|
|
|
|
|
|
|
|
on Dra-
|
|
|
|
|
|
|
|
|
|
|
wings(1)
|
140
|
165
|
90
|
|
|
|
|
|
|
Mar. 31
|
To Bala-
|
|
|
|
|
|
|
|
|
|
|
nee c/d
|
12,160
|
855
|
1,090
|
|
|
|
|
|
|
|
|
15,800
|
5,520
|
3,680
|
|
|
15,800
|
5,520
|
3,680
|
|
(ii) When Capitals are floating :
|
|
|
|
|
|
|
|
Dr.
|
|
|
|
|
|
|
|
|
Cr.
|
|
Date
|
Particulars
|
A
|
B
|
C
|
Date
|
Particulars
|
A
|
B
|
C
|
|
2013
|
|
`
|
`
|
`
|
2013
|
|
`
|
`
|
`
|
|
June 1
|
To Dra-
|
|
|
|
April 1
|
By Balance
|
|
|
|
|
|
wings
|
2,000
|
2,000
|
1,000
|
|
b/d
|
60,000
|
30,000
|
20,000
|
|
Oct. 1
|
To Dra-
|
|
|
|
2014
|
|
|
|
|
|
|
wings
|
1,000
|
1,500
|
1,000
|
Mar. 31
|
By Interest
|
|
|
|
|
Dec. 1
|
To Dra-
|
|
|
|
|
on
|
|
|
|
|
|
wings
|
500
|
1,000
|
500
|
|
Capital
|
3,600
|
1,800
|
1,200
|
|
2014
|
|
|
|
|
Mar. 31
|
By Salary
|
6,000
|
—
|
—
|
|
Mar. 31
|
To Interest
|
|
|
|
Mar. 31
|
By P&L
|
|
|
|
|
|
on Dra-
|
|
|
|
|
Appro-
|
|
|
|
|
|
wings
|
140
|
165
|
90
|
|
priation
|
|
|
|
|
Mar. 31
|
To Bala-
|
|
|
|
|
A/c
|
6,200
|
3,720
|
2,480
|
|
|
nee c/d
|
72,160
|
30,855
|
21,090
|
|
|
|
|
|
|
|
|
75,800
|
35,520
|
23,680
|
|
|
75,800
|
35,520
|
23,680
|
Working Notes:
(i) Calculation of Interest on Drawings :
|
A
|
B
|
C
|
|
Date
|
Amount
|
Period
Months
|
Pro
ducts
|
Date
|
Amount
|
Period
Months
|
Pro
ducts
|
Date
|
Amount
|
Period
Months
|
Pro
ducts
|
|
1.6.13
|
`
2,000
|
10
|
`
20,000
|
1.6.13
|
`
2,000
|
10
|
`
20,000
|
1.6.13
|
`
1,000
|
10
|
`
10,000
|
|
1.10.13
|
1,000
|
6
|
6,000
|
1.10.13
|
1,500
|
6
|
9,000
|
1.10.13
|
1,000
|
6
|
6,000
|
|
1.12.13
|
500
|
4
|
2,000
|
1.12.13
|
1,000
|
4
|
4,000
|
1.12.13
|
500
|
4
|
2,000
|
|
|
|
|
28,000
|
|
|
|
33,000
|
|
|
|
18,000
|
Interest on Drawings:
A = 28,000/12 x 6/100 = `140
B = 33,000/12 x 6/100 = `165
C = 18,000/12 x 6/100 = `90
SOLUTION : 89.
Books of P, Q and R
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March. 2013 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capitals :
|
|
|
By Profit & Loss A/c
|
|
|
P
|
36,000
|
|
(Net Profit for the year)
|
4,96,310
|
|
Q
|
27,000
|
|
By Interest on Drawings :
|
|
|
R
|
21,000
|
84,000
|
P `60,000 x 8/100 x 6.5/12
= 2,600
Q `90,000 x 8/100 x 5.5/12
= 3,300
R `70,000 x 8/100 x 6/12
= 2,800
|
|
|
To Salary :
P
|
48,000
|
|
8,700
|
|
Q
To Commission (Note 1)
P
|
60,000
15,650
|
1,08,000
|
|
Q
|
|
14,160
|
29,810
|
|
To Profit transferred to (Note 2):
|
|
|
P’s Capital A/c
|
94,400
|
|
|
Q’s Capital A/c
|
77,200
|
|
|
R’s Capital A/c
|
1,11,600
|
2,83,200
|
|
|
|
|
|
5,05,010
|
5,05,010
|
|
Dr.
|
|
CAPITAL ACCOUNTS
|
|
|
Cr.
|
|
Particulars
|
P
|
Q
|
R
|
Particulars
|
P
|
Q
|
R
|
|
|
`
|
`
|
`
|
|
`
|
`
|
`
|
|
To Drawings
|
60,000
|
90,000
|
70,000
|
By Bank
|
6,00,000
|
4,50,000
|
3,50,000
|
|
To Interest on
|
|
|
|
By Int. on
|
|
|
|
|
Drawings
|
2,600
|
3,300
|
2,800
|
Capital
|
36,000
|
27,000
|
21,000
|
|
To Bal. c/d
|
7,31,450
|
5,35,060
|
4,09,800
|
By Salary
By Commi-
|
48,000
|
60,000
|
—
|
|
|
|
|
|
ssion
|
15,650
|
14,160
|
—
|
|
|
|
|
|
By P & L
|
|
|
|
|
|
|
|
|
App. A/c
|
94,400
|
77,200
|
1,11,600
|
|
|
7,94,050
|
6,28,360
|
4,82,600
|
|
7,94,050
|
6,28,360
|
4,82,600
|
|
|
|
|
|
|
|
|
|
Working Notes :
|
(1) Balance of Profit = `4,96,310 + `8,700 – `84,000 – `1,08,000 = `3,13,010
|
|
|
Commission to P = 3,13,010 x 5/100
|
= ` 15,650
|
|
|
|
Remaining Profit = 3,13,010 – 15,650
|
= `2,97,360
|
|
|
|
Commission to Q = 2,97,360 x 5/105
|
= ` 14,160
|
|
|
|
(2) Divisible Profit =2,97,360 – 14,160
|
= U,83,200
|
|
|
|
|
P
|
Q
|
R
|
|
|
`
|
`
|
`
|
|
Upto `1,80,000 Equally
|
60,000
|
60,000
|
60,000
|
|
2,83,200 – 1,80,000 = 1,03,200 in 1/3:1/6:1/2
|
34,400
|
17,200
|
51,600
|
|
|
94,400
|
77,200
|
1,11,600
|
SOLUTION : 90.
Case (i) If partnership deed is silent as to the treatment of interest as a charge or appropriation :
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ending on 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital :
|
|
By Profit & Loss A/c
|
|
|
X 60,000 x 3/6
|
30,000
|
(Profit for the year)
|
60,000
|
|
Y 60,000 x 2/6
|
20,000
|
|
|
|
Z 60,000 x 1/6
|
10,000
|
|
|
|
|
60,000
|
|
60,000
|
Note : The available profit is `60,000 whereas the interest due on capitals is `72,000 (i.e., `36,000 + `24,000 + `12,000). Since the profit is less than the interest, the available profit will be distributed in the ratio of interest i.e., 36,000 : 24,000 : 12,000 or 3 : 2 : l.
Case (ii) If partnership deed provides for interest even if it involves the firm in loss :
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ending on 31st March, 2016 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Interest on Capital:
|
|
|
By Profit & Loss A/c
|
|
|
|
X
|
36,000
|
|
(Profit for the year)
|
|
60,000
|
|
Y
|
24,000
|
|
By Loss Transferred to :
|
|
|
|
Z
|
12,000
|
72,000
|
X 5/10
|
6,000
|
|
|
|
|
|
Y 3/10
|
3,600
|
|
|
|
|
|
Z 2/10
|
2,400
|
12,000
|
|
|
|
72,000
|
|
|
72,000
|
Adjustments in the Closed Accounts
SOLUTION : 91.
TABLE SHOWING ADJUSTMENT
|
Particulars
|
Raja
|
Roopa
|
Mala
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest already credited @ 6%
|
72,000
|
54,000
|
36,000
|
1,62,000
|
|
Interest that should have been credited @ 5%
|
60,000
|
45,000
|
30,000
|
1,35,000
|
|
Partner’s excess credited with
|
12,000
|
9,000
|
6,000
|
27,000
|
|
By disallowing this interest, the profits of the firm will be increased by `27,000. This profit will be divided equally
|
9,000
|
9,000
|
9,000
|
27,000
|
|
Net effect
|
(Dr.)
3,000
|
—
|
(Cr.)
3,000
|
—
|
Adjustment Entry :
|
Date
|
Particulars
|
L.F.
|
Dr.(`)
|
Cr.(`)
|
|
2016
Mar. 31
|
Raja’s Current A/c
To Mala’s Current A/c
(Adjustment for excess interest on capital allowed to partners)
|
Dr.
|
|
3,000
|
3,000
|
|
|
|
|
|
|
SOLUTION : 92.
TABLE SHOWING ADJUSTMENT
|
Particulars
|
P
|
Q
|
Total
|
|
|
`
|
`
|
`
|
|
Interest already credited @ 12%
|
60,000
|
96,000
|
1,56,000
|
|
Interest that should have been credited @ 10%
|
50,000
|
80,000
|
1,30,000
|
|
Partners Over credited with
|
10,000
|
16,000
|
26,000
|
|
By recovering this interest from the partners, the profits of the firm will be increased by `26,000. This profit will be divided in the ratio of 7 : 3
|
18,200
|
7,800
|
26,000
|
|
Net effect
|
(Cr.) 8,200
|
(Dr.) 8,200
|
—
|
Adjustment Entry :
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014 March 31
|
Q’s Current A/c
To P’s Current A/c
(Interest excessive charged, now rectified)
|
Dr.
|
|
8,200
|
8,200
|
|
|
|
|
|
|
SOLUTION : 93.
Case (a)
|
Particulars
|
A
|
B
|
C
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest on Capital already credited @ 8% p.a.
|
16,000
|
24,000
|
32,000
|
72,000
|
|
Division of firm’s gain of `72,000 in profit sharing ratio
|
24,000
|
24,000
|
24,000
|
72,000
|
|
Net Effect
|
(Cr.) 8,000
|
—
|
(Dr.) 8,000
|
—
|
Adjustment Entry :
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014
March 31
|
C’s Current A/c
To A’s Current A/c
(Interest on capital wrongly credited, now rectified)
|
Dr.
|
|
8,000
|
8,000
|
|
|
|
|
|
|
Case (b)
|
Particulars
|
A
|
B
|
C
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest allowed on capitals @ 8% p.a.
Division of firm’s loss of `72,000 in
|
16,000
|
24,000
|
32,000
|
72,000
|
|
profit sharing ratio
|
24,000
|
24,000
|
24,000
|
72,000
|
|
Net Effect
|
(Dr.) 8,000
|
—
|
(Cr.) 8,000
|
—
|
Adjustment Entry :
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014 March 31
|
A’s Current A/c Dr.
To C’s Current A/c
(Adjustment for omission of interest on Capitals)
|
|
8,000
|
8,000
|
Case (c)
|
Particulars
|
A
|
B
|
c
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest already credited @ 8%
|
16,000
|
24,000
|
32,000
|
72,000
|
|
Interest that should have been credited 10%
|
20,000
|
30,000
|
40,000
|
90,000
|
|
Partners less credited with
|
4,000
|
6,000
|
8,000
|
18,000
|
|
By allowing this interest, the profits of the firm will be reduced by `18,000. This loss will be divided in profit sharing ratio i.e., equally
|
6,000
|
6,000
|
6,000
|
|
|
Net Effect
|
(Dr.)2,000
|
—
|
(Cr.)2,000
|
—
|
Adjustment Entry :
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014 March 31
|
A’s Current A/c Dr.
To C’s Current A/c
(Interest less charged on capital, now rectified)
|
|
2,000
|
2,000
|
Case (d)
|
Particulars
|
A
|
B
|
c
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest already credited @ 10%
|
20,000
|
30,000
|
40,000
|
90,000
|
|
Interest that should have been credited 8%
|
16,000
|
24,000
|
32,000
|
72,000
|
|
Partners over credited with
|
4,000
|
6,000
|
8,000
|
18,000
|
|
By recovering this interest from the partners, the profits of the firm will be increased by `18,000. This will be divided in profit sharing ratio i.e., equally
|
6.000
|
6,000
|
6,000
|
18,000
|
|
Net Effect
|
(Cr.)2,000
|
—
|
(Dr.)2,000
|
—
|
Adjustment Entry :
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014
March 31
|
C’s Current A/c Dr.
To A’s Current A/c
(Interest excessive charged on capital now rectified)
|
|
2,000
|
2,000
|
SOLUTION : 94.
Calculation of Opening Capitals :
|
Particulars
|
E
|
F
|
G
|
|
Capitals on 31.3.2016
Less : Share of Profit (which has already been credited)
|
`
2,95,000
90,000
|
`
3,30,000
60,000
|
`
3,35,000
30,000
|
|
Add: Drawings (which were previously deducted
Capitals on 1.4.2015
|
2,05,000
40,000
|
2,70,000
40,000
|
3,05,000
40,000
|
|
2,45,000
|
3,10,000
|
3,45,000
|
|
Particulars
|
E
|
F
|
G
|
Total
|
|
|
`
|
`
|
`
|
`
|
|
Interest allowed on opening capitals @ 12%
Division of firm’s loss of `1,08,000
|
29,400
|
37,200
|
41,400
|
1,08,000
|
|
in 3 : 2 : 1
|
54,000
|
36,000
|
18,000
|
1,08,000
|
|
|
(Dr.)
|
(Cr.)
|
(Cr.)
|
—
|
|
|
24,600
|
1,200
|
23,400
|
|
Adjustment Entry :
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016
March 31
|
E’s Capital A/c Dr.
To F’s Capital A/c
To G’s Capital A/c
(Adjustment for omission of interest on capitals)
|
|
24,600
|
1,200
23,400
|
SOLUTION : 95.
|
Particulars
|
A (`)
|
B(`)
|
|
Closing Capitals
|
6,40,000
|
4,60,000
|
|
Less : Share of Profit
|
2,00,000
|
2,00,000
|
|
|
4,40,000
|
2,60,000
|
|
Add: Drawings
|
1,20,000
|
1,40,000
|
|
Opening Capitals
|
5,60,000
|
4,00,000
|
Interest on Capitals:
A = `5,60,000 x 12/100 = `67,200
B = `4,00,000 x 12/100 = `48,000
SOLUTION : 96.
JOURNAL
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
Param’s Currrent A/c Dr.
Priya’s Current A/c Dr.
To Prem’s Current A/c
(Change in the profit sharing ratio incorporated retrospectively)
|
|
1,55,000
1,55,000
|
3,10,000
|
Working Notes : Total Profit = 2,00,000 + 3,50,000 + 4,75,000 + 5,25,000 = `15,50,000
TABLE SHOWING ADJUSTMENTS
|
Particulars
|
Prem
|
Param
|
Priya
|
Total
|
|
Profits already distributed (Dr.)
|
`
|
`
|
`
|
`
|
|
(in the ratio of 2 : 3 : 5)
Profits to be distributed (Cr.)
|
3,10,000
|
4,65,000
|
7,75,000
|
15,50,000
|
|
(in the ratio of 2 : 1 : 2)
|
6,20,000
|
3,10,000
|
6,20,000
|
15,50,000
|
|
Net effect
|
(Cr.)
3,10,000
|
(Dr.)
1,55,000
|
(Dr.)
1,55,000
|
|
SOLUTION : 97. (HOTS)
STATEMENT OF ADJUSTMENTS
|
Particulars
|
Alex
|
John
|
Sam
|
|
1. Amount which should have been credited :
|
`
|
`
|
`
|
|
Salary
Interest on Capital
|
10,000
|
12,000
8,000
|
6,000
|
|
Profit (`75,000 – `12,000 – `24,000 + `300 for interest on drawings = `39,300) in 5 : 4 : 3
|
16,375
|
13,100
|
9,825
|
|
Cr.
|
26,375
|
33,100
|
15,825
|
|
2. Amount which should have been debited :
Interest on Drawings
|
100
|
100
|
100
|
|
Profit already distributed equally
|
25,000
|
25,000
|
25,000
|
|
Dr.
|
25,100
|
25,100
|
25,100
|
|
Net Effect
|
(Cr.) 1,275
|
(Cr.) 8,000
|
(Dr.) 9,275
|
ADJUSTMENT ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
|
Sam’s Capital A/c Dr.
To Alex’s Capital A/c
To John’s Capital A/c
(Adjustment for salary, interest on capital, interest on drawing and wrong distribution of profit)
|
|
9,275
|
1,275
8,000
|
SOLUTION : 98.
STATEMENT OF ADJUSTMENTS
|
Particulars
|
A
|
B
|
C
|
Total
|
|
|
|
`
|
`
|
`
|
`
|
|
Salary to C
|
(Cr.)
|
|
|
60,000
|
60,000
|
|
Commission to A
|
(Cr.)
|
80,000
|
|
|
80,000
|
|
Interest on Capital
|
(Cr.)
|
30,000
|
15,000
|
15,000
|
60,000
|
|
Profit remaining after allowing salary, commission and interest on Capital will be `3,00,000 – `60,000 – `80,000 – `60,000 = `1,00,000. It will be divided in their profit sharing ratio i.e. 2:1:1.
|
50,000
|
25,000
|
25,000
|
1,00,000
|
|
Net amount which should have been received (Cr.)
|
|
|
|
|
|
1,60,000
|
40,000
|
1,00,000
|
3,00,000
|
|
Less : Profit already distributed equally (Dr.)
|
1,00,000
|
1,00,000
|
1,00,000
|
3,00,000
|
|
(Cr.) 60,000
|
(Dr.) 60,000
|
—
|
—
|
ADJUSTMENT JOURNAL ENTRY
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2017
March 31
|
B’s Capital A/c Dr.
To A’s Capital A/c
(Adjustment for salary, commission, interest on capital and wrong distribution of profit)
|
|
60,000
|
60,000
|
Guarantee of Profit to a Partner
SOLUTION : 99.
JOURNAL
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014
|
Profit & Loss A/c
To Profit & Loss Appropriation A/c
(Transfer of profits)
|
|
|
39,500
|
|
|
March 31
|
Dr.
|
|
39,500
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
Profit & Loss Appropriation A/c
To X^s Capital A/c
To y’s Capital A/c
To Z’s Capital A/c
(Profits distributed as per working note)
|
Dr.
|
|
39,500
|
16,857
12,643
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Note:
Distribution of Profit:
|
X
|
39,500 x 16/35
|
= `18,057
|
|
Y
|
39,500 x 12/35
|
= `13,543
|
|
Z
|
39,500 x 7/35
|
= `7,900
|
Z’s share in profits amounts to `7,900 whereas the minimum guaranteed amount is `10,000. Hence, the deficiency will be borne by X and Y in the ratio of 16 : 12.
X’s share = 2,100 x 16/28 = `1,200
Y’s share = 2,100 x 12/28 = `900
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To X’s Capital A/c
|
18,057
|
|
By Profit & Loss A/c
|
|
|
Less : Transferred to Z
|
1,200
|
16,857
|
– being profit
|
39,500
|
|
To Y’s Capital A/c
|
13,543
|
|
|
|
|
Less : Transferred to Z
|
900
|
12,643
|
|
|
|
To Z’s Capital A/c
|
7,900
|
|
|
|
|
Add : From X
|
1,200
|
|
|
|
|
From Y
|
900
|
10,000
|
|
|
|
|
|
39,500
|
|
39,500
|
|
|
|
|
|
|
SOLUTION : 100.
JOURNAL
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2014 March 31
|
Profit & Loss A/c
To Profit & Loss Appropriation A/c
(Transfer of profits)
|
Dr.
|
|
25,000
|
25,000
|
|
|
Profit & Loss Appropriation A/c
To A’s Capital A/c
To B’s Capital A/c
To C’s Capital A/c
(Profits distributed as per working note)
|
Dr.
|
|
25,000
|
10,000
6,000
|
Working Note:
|
Distribution of Profit:
|
|
|
A
|
25,000 x 2/5
|
= `10,000
|
|
B
|
25,000 x 2/5
|
= `10,000
|
|
C
|
25,000 x 1/5
|
= `5,000
|
C’s share in profits amounts to `5,000 whereas the minimum guaranteed amount is `6,000. Hence, the deficiency will be borne by A.
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To A’ s Capital A/c 10,000 Less : Transferred to C 1,000
To B’s Capital A/c
To C’s Capital A/c 5,000
Add: From A 1,000
|
9,000
10,000
6,000
|
By Profit & Loss A/c – being profit
|
25,000
|
|
25,000
|
25,000
|
SOLUTION : 101.
Profit of `1,40,000 divided in the ratio of 5 : 4 : 1
|
A’s Share :
|
1,40,000 x 5/10
|
= `70,000
|
|
B’s Share
|
1,40,000 x 4/10
|
= `56,000
|
|
C’s Share :
|
1,40,000 x 1/10
|
= `14,000
|
C’s share in profits amounts to `14,000 whereas the minimum guaranteed amount is `20,000. Hence, the deficiency of `6,000 will be borne by A and B in the ratio of 3 : 2. The adjustment entry will be:
|
Date
|
Particulars
|
L.F.
|
Dr. (`)
|
Cr. (`)
|
|
2016 March 31
|
A’s Capital A/c Dr.
B’s Capital A/c Dr.
To C’s Capital A/c
(Deficiency of C met by A and B in the ratio of 3 : 2)
|
|
3,600
2,400
|
6,000
|
SOLUTION : 102.
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
Tory’s Capital A/c
2/3 of 2,70,000
Less : Given to Z
To P’s Capital A/c 1/3 of 2,70,000
To Z’s Capital A/c
|
1,80,000
12,400
|
1,67,600
90,000
64,400
|
By Profit & Loss A/c
|
3,22,000
|
|
|
|
3,22,000
|
|
3,22,000
|
|
Profit before Z’s Salary and Commission
|
`
3,22,000
|
|
Less: Salary
|
25,000
2,97,000
|
|
Less : Z’s Commission 10/110 of 2,97,000
|
27,000
2,70,000
|
|
Thus Z as a manager will receive :
|
`
|
|
Salary `25,000 + Commission `27,000
|
52,000
|
|
Z as a partner will receive : 3,22,000 x 1/5
|
64,400
|
|
Excess received by Z as a partner This excess amount of
` 12,400 will be deducted from A’s share.
|
12,400
|
SOLUTION : 103.
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March, 2014 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To X’s Capital A/c 2/3 of 1,22,400
Less : Given to Z
To Y’s Capital A/c 1/3 of 1,22,400
To Z’s Capital A/c
|
81,600
2,400
|
79,200
40,800
30,000
|
By Profit & Loss A/c
Add: Z’s Salary
|
1,28,520
21,480
|
1,50,000
|
|
|
|
1,50,000
|
|
|
1,50,000
|
|
Profit before Z’s Salary and Commission
|
`
1,50,000
|
|
Less: Z’s Salary
|
21,480
1,28,520
|
|
Less : Z’s Commission 5/105 of 1,28,520
|
6,120
1,22,400
|
|
Thus Z as a manager will receive :
|
`
|
|
Salary `21,480 + Commission `6,120
|
27,600
|
|
Z as a partner will receive : 1,50,000 x 1/5
|
30,000
|
|
Excess received by Z as a partner This excess amount of `2,400 will be deducted from X’s share.
|
2,400
|
SOLUTION : 104.
PROFIT & LOSS APPROPRIATION ACCOUNT
Dr. for the year ended 31st March. 2013 Cr.
|
Particulars
|
`
|
Particulars
|
`
|
|
To Pranshu’s Capital A/c
(75,000 x 3/5 ) 45,000
Less : Transferred to
Anshu 15,000
To Himanshu’s Capital A/c
|
30,000
30,000
30,000
|
By Profit & Loss A/c (Profit for the year)
|
90,000
|
|
(75,000 x 2/5)
|
|
|
|
To Anshu’s Capital A/c
|
|
|
|
(90,000 x 1/6 ) 15,000
|
|
|
|
Add: Received from
Pranshu 15,000
|
|
|
|
|
90,000
|
|
90,000
|
Working Note:
|
Anshu’s share of profit
|
= 90,000 x 1/6
|
= `15,000
|
|
Remaining profit
|
= 90,000 – 15,000
|
= `75,000
|
|
Pranshu’s share
|
= 75,000 x 3/5
|
= `45,000
|
|
Himanshu’s share
|
= 75,000 x 2/5
|
= `30,000
|
Since Anshu’s share of profit amounts to `15,000 whereas minimum guaranteed amount is `30,000, deficiency of `15,000 will be deducted from Pranshu’s share and added to Anshu’s share.
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