Page 33 - ISCDEBK-12

Partnership Accounts—Fundamentals 1.23

(iii) Interest on drawings is charged @ 6% p.a.
(iv) Mohan is entitled to a salary of ` 2,500 per month.
(v) Ram is entitled to commission of 5% of the net profit of the firm.
(vi) Shyam is entitled to commission of 5% of the net profit of the firm after charging such commission.
During the half year ended 30th September, 2019 net profit of the firm was ` 10,35,000 after charging
Mohan’s salary which had been debited to Wages and Salaries Account.
You are required to prepare Profit and Loss Appropriation Account of the firm only.
5. Prateet, Namrata and Shubhrata are partners sharing profits in the ratio of 5 : 3 : 2. Their other terms
of agreement are:
Particulars Prateet Namrata Shubhrata
Interest on Capital @ 6% p.a. @ 6% p.a. @ 6% p.a.
Interest on drawings (except salary) is to be charged @ 6% p.a. @ 6% p.a. @ 6% p.a.
Salary @ ` 1,000 p.m. ... ...
Shubhrata is entitled to receive commission on the profits after charging such
commission and making above adjustments ... ... 5%
On 1st April, 2019, Prateet, Namrata and Shubhrata have capitals of ` 30,000; ` 40,000 and ` 24,000
respectively. Namrata withdrew ` 4,000 on 31st December, 2019 and Shubhrata introduced ` 4,000
on 1st March, 2020. Prateet had no drawings except salary of ` 1,000 per month. Namrata’s drawings
were ` 1,000 on 1st August and ` 1,400 on 30th November, 2019. Shubhrata regularly drew ` 400 at
the end of each month. Net profit for the year ended 31st March, 2020 was ` 44,490.
Prepare Profit and Loss Appropriation Account.
6. X, Y and Z commenced business on 1st April, 2017 as partners with capitals of ` 4,00,000; ` 12,00,000
and ` 6,00,000. They mutually agreed for:
(i) 10% p.a. interest on capitals;
(ii) 15% p.a. interest on drawings;
(iii) X will get 5% commission on sales;
(iv) Y will get ` 50,000 per month as salary and
(v) Balance of profit to be distributed in the ratio of 2 : 2 : 1.
Z also provided a loan of ` 2,00,000 @ 8% p.a. to the firm.
Total sales during the first year (i.e., 2017–18) were ` 80,00,000 and the net profit at the end of the
year was ` 21,72,500 (after providing interest on loan).
During the year, X introduced ` 12,00,000 to the firm as additional capital on 30th September, 2017
but Y withdrew ` 2,00,000 out of his capital on the same date.
Their drawings were:
Partners On 30th June, On 30th Sept., On 31st Dec.,
2017 (`) 2017 (`) 2017 (`)
X 1,00,000 1,80,000 2,00,000
Y 1,60,000 1,60,000 1,60,000
Z 1,80,000 60,000 1,20,000
You are required to prepare Profit and Loss Appropriation Account for the year ended 31st March,
2018 and Partners’ Capital and Current Accounts.
7. X, Y and Z started business on 1st April, 2017 with capitals of ` 1,00,000; ` 60,000 and ` 40,000
respectively. Their Partnership Deed provides that:
(i) interest on partners’ capitals should be provided @ 5% p.a.
(ii) interest on partners’ drawings should be charged @ 10% p.a.
(Drawings: X—` 10,000; Y—` 6,000 and Z—` 4,000)
(iii) the partners are entitled to a partnership salary of ` 5,000 each per annum.
(iv) X is entitled to a commission @ 10% on the profit before charging the above provisions.