Page 54 - DEBKVOL-1

2.26 Double Entry Book Keeping—CBSE XII

3. Ram and Mohan are equal partners. Their capitals are ` 4,000 and ` 8,000 respec tively. After the accounts
for the year are prepared it is discovered that interest @ 5% p.a. on capital as provided in the Partnership
Deed has not been credited to the Capital Accounts before distribution of profits. It is decided to make an
adjusting entry in the beginning of the next year.
Give necessary adjustment entry. [Ans.: Debit Ram and Credit Mohan by ` 100.]
4. X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They have a manager, Z, who gets ` 10,000
p.m. salary plus commission of 5% of the profit after charging his salary and commission. Now, they decide
to admit Z as a partner, giving him 1/5th share in the profits of the firm. Any excess amount which Z receives
as a partner (over his salary and commission) will be borne by X. The profit for the year ended 31st March,
2018 amounted to ` 8,40,000 after charging Z’s salary. Prepare Profit and Loss Appropriation Account
showing the division of profit for the year.
[Ans.: Z’s Share as a Manager = ` 1,60,000; Z’s Share as a Partner = ` 1,92,000
Deficiency of ` 32,000 to be met by X. Final Share of Profit:
X = ` 4,48,000; Y = ` 3,20,000; Z = ` 1,92,000.]
5. A and B are partners sharing profits and losses equally with capitals of ` 30,000 and ` 20,000 respectively.
Their drawings during the year 2018–19 are:
`
A’s drawings on 30th June, 2018 500
31st July, 2018 600
1st October, 2018 450
1st March, 2019 1,400
B drew ` 300 at the end of each month. The Deed provides for interest on capitals and drawings @ 6% p.a.
Calculate interest on capitals and drawings for the year ended 31st March, 2019.
[Ans.: Interest on Capitals: A—` 1,800 and B—` 1,200;
Interest on Drawings: A—` 67 and B—` 99.]
6. Kalu and Lalu are partners in a firm. Their capitals on 1st April, 2017 were: Kalu ` 50,000 and Lalu ` 30,000.
They share profits and losses in the ratio of 3 : 2. They earned profits of ` 55,000 for the year ended
31st March, 2018. Their Drawings were: Kalu ` 3,500 and Lalu ` 2,400.
Prepare Profit and Loss Appropriation Account and the Partners’ Capital Accounts after taking into
consideration the following facts:
(a) Partners’ Salaries—Kalu ` 500 per month, Lalu ` 400 per month.
(b) Interest is payable @ 5% p.a. on the Partners’ Capitals.
(c) Interest is to be charged @ 5% p.a. on the Partners’ Drawings.
[Ans.: Divisible Profit: Kalu—` 24,208.50 and Lalu—` 16,139;
Balance of Capital: Kalu—` 79,121 and Lalu—` 49,979.]
7. Ripa, Rini and Rima are three partners in a firm. According to Partnership Deed, the partners are entitled
to draw ` 700 per month. On 1st day of every month Ripa, Rini and Rima draw ` 700, ` 600 and ` 500
respectively. Interest on capitals and interest on drawings are fixed @ 8% p.a. and 10% p.a. respectively.
Profit during the year 2017–18 was ` 75,500 out of which ` 20,000 is transferred to the General Reserve.
Rini and Rima are entitled to receive a salary of ` 3,000 and ` 4,500 p.a. respectively and Ripa is entitled to
receive commission @ 10% on net distributable profits after charging such commission.
On 1st April, 2017, the balances of their Capital Accounts were ` 50,000, ` 40,000 and ` 35,000 respectively.
You are required to show the Profit and Loss Appropriation Account for the year ended 31st March, 2018
and the Capital Accounts of Partners in the books of the firm.
[Ans.: Net Divisible Profit—` 35,609; Ripa’s Commission—` 3,561; Closing Balance
of Capital A/cs: Ripa—` 60,576; Rini—` 50,480; Rima—` 47,844.]
[Hint: Interest on Drawings (For 6.5 months): Ripa ` 455; Rini ` 390; Rima ` 325.
Ripa’s Commission = 10/110 of [` 75,500 + ` 1,170 (Interest on Drawings) – ` 20,000 (General Reserve)
– ` 10,000 (Interest on Capital) – ` 7,500 (Salary)] = ` 3,561.]