Preparation of Profit and Loss Appropriation Account

Usha and Uma were partners in a firm sharing profits in the ratio of 3:2. On 1-4-2014 they admitted Urmila as a new partner with 1/5th share in the profits with a guaranteed profit of Rs 30,000. The new profit sharing ratio between Usha and Uma will remain the same but they agreed to bear any deficiency on account of guarantee to Urmila in the ratio of 7:3. The profit of the firm for the year ended 31-3-2015 was Rs 1, 35,000.

Prepare Profit and Loss Appropriation Account of Usha, Uma and Urmila for the year ended 31-3-2015.

E and F were partners in a firm sharing profits in the ratio of 7:3. On 1-4-2014 they admitted G as a new partner for 1/5th share in the profit with a guaranteed profit of Rs.60,000. The new profit sharing ratio between E and F will remain the same but they agreed to bear any deficiency on account of guarantee to G in the ratio of 3:7. The profit of the firm for the year ended 31-3-2015 was Rs.2,70,000.

Prepare Profit and Loss Appropriation Account of E, F and G for the year ended 31-3-2015.

Vikas and Vivek were partners in a firm sharing profits in the ratio of 3: 2.

On 1.4.2014 they admitted Vandana as a new partner for 1/8th the share in the profits with a guaranteed profit of Rs.1,50,000. The new profit sharing ratio between Vivek and Vikas will remain the same but they decided to bear any deficiency on account of guarantee to Vandana in the ratio 2: 3. The profit of the firm for the year ended 31.3.2015 was Rs.9, 00,000.

Prepare Profit and Loss Appropriation Account of Vikas, Vivek and Vandana for the year ended 31.3.2015.

On 1-4-2013 Jay and Vijay, entered into the partnership for supplying laboratory equipment to
government schools situated in remote and backward areas. They contributed capitals of `80,000 and Rs 50,000 respectively and agreed to share the profits in the ratio 3: 2. The partnership deed provided that interest on capital shall be allowed at 9% per annum. During the year the firm earned a profit of Rs 7,800. Showing your calculations clearly, prepare Profit and Loss Appropriation Account of Jay and Vijay for the year ended 31-3-2014

Arjun, Bhim and Nakul are partners sharing profits & losses in the ratio of 14 : 5 : 6 respectively.

Bhim retires and surrenders his 5/25^th share in favour of Arjun. The goodwill of the firm is valued at 2 years purchase of super profits based on average profits of last 3 years. The profits for the last 3 years are Rs 50,000, Rs 55,000 & Rs 60,000 respectively. The normal profits for the similar firm are Rs 30,000. Goodwill already appears in the books of the firm at Rs 75,000.

The profit for the first year after Bhim's retirement was Rs 1,00,000. Give the necessary Journal

Entries to adjust Goodwill and distribute profits showing your workings.

A Partnership firm earned net profits during the last three years as follows: 

The capital employed in the firm throughout the above mentioned period has been Rs 4,00,000. Having regard to the risk involved,

15% is considered to be a fair return on the capital. The remuneration of all the partners during this period is estimated to be Rs 1,00,000 per annum.

Calculate the value of goodwill on the basis of (i) two year’s purchased of super profits earned on a average basis during the above mentioned three years and (ii) by capitalization method. 

Jain, Gupta and Singh were partners in a firm. Their fixed capitals were: Jain Rs 4,00,000 Gupta Rs  6,00,000 and Singh Rs 10,00,000. They were sharing profits in the ratio of their capitals. The firm was engaged in the processing and distribution of flavoured milk. They partnership deed provided for interest on capital at 10% per annum. During the year ended 31st March 2014, the firm earned a profit of Rs 1,47,000.

Showing your working notes clearly, prepare Profit and Loss Appropriation Account of the firm.

Singh and Gupta decided to start a partnership firm to manufacture low-cost jute bags as plastic bags were creating many environmental problems. They contributed capitals of Rs 1,00,000 and Rs 50,000 on 1st April 2012 for this. Singh expressed his willingness to admit Shakti as a partner without capital, who is specially abled but a very creative and intelligent friend of his. Gupta agreed to this. The terms of the partnership were as follows :

1) Singh, Gupta and Shakti will share profits in the ratio of 2:2:1.

2) Interest on capital will be provided @ 6% p.a.

Due to the shortage of capital, Singh contributed Rs 25,000 on 30th September 2012 and Gupta contributed Rs 10,000 on 1st January 2013 as additional capital. The profit of the firm for the year ended 31st March 2013 was Rs 1,68,900.

a. Identify any two values which the firm wants to communicate to the society.

b. Prepare Profit and Loss Appropriation Account for the year ending 31st March 2013.