Ramesh and Suresh Were Partners in a Firm Sharing Profits in the Ratio of Their Capitals Contributed on Commencement of Business Which Were Rs 80,000 and Rs 60,000 Respectively.

प्रश्न

Ramesh and Suresh were partners in a firm sharing profits in the ratio of their capitals contributed on commencement of business which were Rs 80,000 and Rs 60,000 respectively. The firm started business on April 1, 2016. According to the partnership agreement, interest on capital and drawings are 12% and 10% p.a., respectively. Ramesh and Suresh are to get a monthly salary of Rs 2,000 and Rs 3,000, respectively.
The profits for year ended March 31, 2017 before making above appropriations was Rs 1,00,300. The drawings of Ramesh and Suresh were Rs 40,000 and Rs 50,000, respectively. Interest on drawings amounted to Rs 2,000 for Ramesh and Rs 2,500 for Suresh. Prepare Profit and Loss Appropriation Account and partners’ capital accounts, assuming that their capitals are fluctuating.

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उत्तर

Profit and Loss Appropriation Account

Dr. Cr.

Particulars		Amount Rs	Particulars		Amount Rs
Interest on Capital			Profit and Loss		1,00,300
Ramesh	9,600	16,800	Interest on Drawings
Suresh	7,200		Ramesh	2,000	4,500
Partners’ Salaries			Suresh	2,500
Ramesh	24,000	60,000
Suresh	36,000
Profit Transferred to
Ramesh’s Capital {28,000 × (4/7)}		16,000
Suresh’s Capital {28,000 × (3/7)}		12,000
		1,04,800			1,04,800

Partners’ Capital Account

Dr. Cr.

Particulars	Ramesh	Suresh	Particulars	Ramesh	Suresh
Drawings	40,000	50,000	Cash	80,000	60,000
Interest on Drawings	2,000	2,500	Interest on Capital	9,600	7,200
Balance c/d	87,600	62,700	Partners’ Salaries	24,000	36,000
			Profit & Loss Appropriation	16,000	12,000
	1,29,600	1,15,200		1,29,600	1,15,200

Capital Ratio = Ramesh : Suresh

= 80000 : 60000

= 4 : 3

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Distribution of Profit Among Partners

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Q 12 Q 11 Q 13

अध्याय 2: Accounting for Partnership : Basic Concepts - Questions for Practice [पृष्ठ १००]

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एनसीईआरटी Accountancy Partnership Accounts [English] Class 12

अध्याय 2 Accounting for Partnership : Basic Concepts
Questions for Practice | Q 12 | पृष्ठ १००

संबंधित प्रश्न

Why is Profit and Loss Adjustment Account prepared? Explain.

Rahul, Rohit and Karan started partnership business on April 1, 2019 with capitals of Rs 20,00,000, Rs 18,00,000 and Rs 16,00,000, respectively. The profit for the year ended March 2020 amounted to Rs 1,35,000 and the partner’s drawings had been Rahul Rs 50,000, Rohit Rs 50,000 and Karan Rs 40,000. The profits are distributed among partner’s in the ratio of 3:2:1. Calculate the interest on capital @ 5% p.a.

Amit, Babita and Sona form a partnership firm, sharing profits in the ratio of 3 : 2 : 1, subject to the following :

i) Sona’s share in the profits, guaranteed to be not less than Rs 15,000 in any year.

ii) Babita gives guarantee to the effect that gross fee earned by her for the firm shall be equal to her average gross fee of the proceeding five years, when she was carrying on profession alone (which is Rs 25,000). The net profit for the year ended March 31, 2017 is Rs 75,000. The gross fee earned by Babita for the firm was Rs 16,000.
You are required to show Profit and Loss Appropriation Account (after giving effect to the alone).

Ashok, Brijesh and Cheena are partners sharing profits and losses in the ratio of 2 : 2 : 1. Ashok and Brijesh have guaranteed that Cheena share in any year shall be less than Rs 20,000. The net profit for the year ended March 31, 2017 amounted to Rs 70,000. Prepare Profit and Loss Appropriation Account.

X, Y and Z are in Partnership, sharing profits and losses in the ratio of 3 : 2 : 1, respectively. Z’s share in the profit is guaranteed by X and Y to be a minimum of Rs 8,000. The net profit for the year ended March 31, 2020 was Rs 30,000. Prepare Profit and Loss Appropriation Account, indicating the amount finally due to each partner.

Abhay, Siddharth and Kusum are partners in a firm, sharing profits in the ratio of 5:3:2. Kusum is guaranteed a minimum amount of Rs 10,000 as per share in the profits. Any deficiency arising on that account shall be met by Siddharth. Profits for the years ending March 31, 2016 and 2017 are Rs 40,000 and 60,000 respectively. Prepare Profit and Loss Appropriation Account.

Amit and Bhola are partners in a firm. They share profits in the ratio of 3:2. As per their partnership agreement, interest on drawings is to be charged @ 10% p.a. Their drawings during 2019 were Rs 24,000 and Rs 16,000, respectively. Calculate interest on drawings based on the assumption that the amounts were withdrawn evenly, throughout the year.

Raj and Neeraj are partners in a firm. Their capitals as on April 01, 2019 were Rs 2,50,000 and Rs 1,50,000, respectively. They share profits equally. On July 01, 2019, they decided that their capitals should be Rs 1,00,000 each. The necessary adjustment in the capitals were made by introducing or withdrawing cash by the partners’. Interest on capital is allowed @ 8% p.a. Compute interest on capital for both the partners for the year ending on March 31, 2020.

Himanshu withdrews Rs 2,500 at the end Month of each month. The Partnership deed provides for charging the interest on drawings @ 12% p.a. Calculate interest on Himanshu’s drawings for the year ending 31st December, 2017.

Rakesh and Roshan are partners, sharing profits in the ratio of 3:2 with capitals of Rs 40,000 and Rs 30,000, respectively.

They withdrew from the firm the following amounts, for their personal use:

Rakesh	Month	Rs.
	May 31, 2019	600
	June 30, 2019	500
	August 31, 2019	1,000
	November 1, 2019	400
	December 31, 2019	1,500
	January 31, 2020	300
	March 01, 2020	700
Rohan	At the beginning of each month	400

Interest is to be charged @ 6% p.a. Calculate interest on drawings, assuming that book of account are closed on March 31, 2020, every year.

Illustrate how interest on drawings will be calculated under various situations.

The partnership agreement between Maneesh and Girish provides that:
(i)    Profits will be shared equally;
(ii)   Maneesh will be allowed a salary of Rs 400 p.m;
(iii)  Girish who manages the sales department will be allowed a commission equal to 10% of the net profits, after allowing Maneesh’s salary;
(iv)  7% interest will be allowed on partner’s fixed capital;
(v)   5% interest will be charged on partner’s annual drawings;
(vi)  The fixed capitals of Maneesh and Girish are Rs 1,00,000 and Rs 80,000, respectively. Their annual drawings were Rs 16,000 and 14,000, respectively. The net profit for the year ending March 31, 2015 amounted to Rs 40,000;
Prepare firm’s Profit and Loss Appropriation Account.

Ram, Raj and George are partners sharing profits in the ratio 5 : 3 : 2. According to the partnership agreement George is to get a minimum amount of Rs 10,000 as his share of profits every year. The net profit for the year 2013 amounted to Rs 40,000. Prepare the Profit and Loss Appropriation Account.

Amann, Babita and Suresh are partners in a firm. Their profit sharing ratio is 2:2:1. Suresh is guaranteed a minimum amount of Rs 10,000 as share of profit, every year. Any deficiency on that account shall be met by Babita. The profits for two years ending March 31, 2016 and March 31, 2017 were Rs 40,000 and Rs 60,000, respectively. Prepare the Profit and Loss Appropriation Account for the two years.

Simmi and Sonu are partners in a firm, sharing profits and losses in the ratio of 3:1. The profit and loss account of the firm for the year ending March 31, 2017 shows a net profit of Rs 1,50,000. Prepare the Profit and Loss Appropriation Account by taking into consideration the following information:
(i) Partners capital on April 1, 2016;
Simmi, Rs 30,000; Sonu, Rs 60,000;
(ii) Current accounts balances on April 1, 2016;
Simmi, Rs 30,000 (cr.); Sonu, Rs 15,000 (cr.);
(iii) Partners drawings during the year amounted toSimmi, Rs 20,000; Sonu, Rs 15,000;
(iv) Interest on capital was allowed @ 5% p.a.;
(v) Interest on drawing was to be charged @ 6% p.a. at an
average of six months;
(vi) Partners’ salaries : Simmi Rs 12,000 and Sonu Rs 9,000. Also show the partners’ current accounts.

Rahul, Rohit and Karan started partnership business on April 1, 2016 with capitals of Rs 20,00,000, Rs 18,00,000 and Rs 16,00,000, respectively. The profit for the year ended March 2017 amounted to Rs 1,35,000 and the partner’s drawings had been Rahul Rs 50,000, Rohit Rs 50,000 and Karan Rs 40,000. The profits are distributed among partner’s in the ratio of 3:2:1. Calculate the interest on capital @ 5% p.a.

Rakesh and Roshan are partners, sharing profits in the ratio of 3:2 with capitals of Rs 40,000 and Rs 30,000, respectively. They withdrew from the firm the following amounts, for their personal use:

Rakesh	Month	Rs
	May 31, 2016	600
	June 30, 2016	500
	August 31, 2016	1,000
	November 1, 2016	400
	December 31, 2016	1,500
	January 31, 2017	300
	March 01, 2017	700
Rohan	At the beginning of each month	400

Interest is to be charged @ 6% p.a. Calculate interest on drawings, assuming that book of accounts are closed on March 31, 2017, every year.

Amit and Bhola are partners in a firm. They share profits in the ratio of 3:2. As per their partnership agreement, interest on drawings is to be charged @ 10% p.a. Their drawings during 2017 were Rs 24,000 and Rs 16,000, respectively. Calculate interest on drawings based on the assumption that the amounts were withdrawn evenly, throughout the year.

Menon and Thomas are partners in a firm. They share profits equally. Their monthly drawings are Rs 2,000 each. Interest on drawings is to be charged @ 10% p.a. Calculate interest on Menon’s drawings for the year 2006, assuming that money is withdrawn: (i) in the beginning of every month, (ii) in the middle of every month, and (iii) at the end of every month.

Pinki, Deepati and Kaku are partner’s sharing profits in the ratio of 5:4:1. Kaku is given a guarantee that his share of profits in any given year would not be less than Rs 5,000. Deficiency, if any, would be borne by Pinki and Deepti equally. Profits for the year amounted to Rs 40,000. Record necessary journal entries in the books of the firm showing the distribution of profit.

X, Y and Z are in Partnership, sharing profits and losses in the ratio of 3 : 2 : 1, respectively. Z’s share in the profit is guaranteed by X and Y to be a minimum of Rs 8,000. The net profit for the year ended March 31, 2017 was Rs 30,000. Prepare Profit and Loss Appropriation Account, indicating the amount finally due to each partner.

Raka, Seema, and Mahesh were partners sharing profits and losses in the ratio of 5: 3: 2. With effect from 1^st April, 2019, they mutually agreed to share profits and losses in the ratio of 2: 2: 1.
On that date, there was a workmen's compensation fund of ₹ 90,000 in the books of the firm. It was agreed that:
(i) Goodwill of the firm be valued at ₹ 70,000.
(ii) Claim for workmen's compensation amounted to ₹ 40,000.
(iii) Profit on revaluation of assets and re-assessment of liabilities amounted to ₹ 40,000.
Pass necessary journal entries for the above transactions in the books of the firm.

Assertion (A): Transfer to reserves is shown in the Profit and Loss Appropriation A/c.

Reason (R): Reserves are charge against the profits.

In the context of the above two statements, which of the following is correct?

On 1st September 2020, twenty students of Modern College started their Partnership Firm in the name of “Be Safe” for selling sanitizers on digital mode. Since they were good friends of each other, they were not having any explicit agreement in place. All of them have agreed to invest ₹ 15,000/- each as capital. The books were closed on 31st March 2021, on which date the following information was provided by the firm:

PARTICULARS	AMOUNT (₹)
Sale of Sanitisers	1,20,000
Cost of goods sold	50,000
Total Remuneration to partners	2,000 per month
Rent to a partner	1,000 per month
Manager’s Commission	5,000
Closing Stock as on March 31,2021	9,000
6% Fixed Deposit (made on 31.3.2021)	20,000

Calculate the amount of profits to be transferred to Profit and Loss Appropriation Account.

On 1st September 2020, twenty students of Modern College started their Partnership Firm in the name of “Be Safe” for selling sanitizers on digital mode. Since they were good friends of each other, they were not having any explicit agreement in place. All of them have agreed to invest ₹15,000/- each as capital. The books were closed on 31st March 2021, on which date the following information was provided by the firm:

PARTICULARS	AMOUNT (₹)
Sale of Sanitisers	1,20,000
Cost of goods sold	50,000
Total Remuneration to partners	2,000 per month
Rent to a partner	1,000 per month
Manager’s Commission	5,000
Closing Stock as on March 31,2021	9,000
6% Fixed Deposit (made on 31.3.2021)	20,000

On 1st December 2020 one of the partners of the firm introduced additional capital of ₹30,000 and also advanced a loan of ₹40,000 to the firm. Calculate the amount of interest that Partner will receive for the current accounting period.

In case the deed provides for payment of interest on capital but does not specify the rate, the interest will be paid at which rate per annum?

In a case where a partner may be guaranteed a minimum amount by way of his share in profits. If in any year, the share of profits is less than the guaranteed amount, the deficiency is made good by the guaranteeing partners' in which ratio?

Guarantee of profit to a partner is given by:

E, F and G are partners sharing profits in the ratio of 3 : 3 : 2. As per the partnership agreement, G is to get a minimum amount of ₹ 80,000 as his share of profits every year and any deficiency on this account is to be personally borne by E. The net profit for the year ended 31st March 2020 amounted to ₹ 3,12,000. What will be the amount of deficiency to be borne by E?

When is the Profit and Loss Appropriation Account prepared?

Where is the Interest in drawings recorded in the Current Account?

Read the following information and answer the given question:

Krishika alumni of IIM Ahemdabad initiated her startup Krishika Ltd. in 2018. The profits of Krishika Ltd. in the year 2019-20 after all appropriations was ₹ 31,25,000. This profit was arrived after taking into consideration the following items:

S. No.	Particulars	Amount (₹)
1.	Gain on sale of fixed tangible assets	12,50,000
2.	Goodwill written off	7,80,000
3.	Transfer to General Reserve	8,75,000
4.	Provision for taxation	4,37,500

Additional information:

Particulars	31.3.2020 (₹)	31.3.2019 (₹)
Prepaid Expenses	7,50,000	5,00,000
Inventory	10,50,000	8,20,000
Trade Payable	4,50,000	3,50,000
Trade Receivables	6,20,000	5,90,000

Cash flow from operating activities will be ₹ ______.

The Journal Entry to transfer interest on capital to Profit and Loss Appropriation Account would be:

If the interest on capital is omitted, what will be the journal entry during the situation?

What will be the interest on capital for C @ 6% p.a for A, B and C who have invested ₹ 15,000, ₹ 25,000 and ₹ 30,000 and share profits in the ratio 1 : 2 : 3?

Richa and Anmol are partners sharing profits in the ratio of 3 : 2 with capitals of ₹ 2,50,000 and ₹ 1,50,000 respectively. Interest on capital is agreed @6% p.a. Anmol is to be allowed an annual salary of ₹ 12,500. During the year ended 31^st March 2023, the profits of the year prior to calculation of interest on capital but after charging Anmol’s salary amounted to ₹ 62,000. A provision of 5% of this profit is to be made in respect of manager’s commission.

Following is their Profit & Loss Appropriation Account.

Particulars	(₹)	Particulars	(₹)
To Interest on Capital		By Profit & loss account (After manager’s commission)	___(2)___
Richa	______
Anmol	______
To Anmol’s Salary a/c	12,500
To Profit transferred to:
Richa’s Capital A/C (1)	___(1)___
Anmol’s Capital A/c	______
	______		______

The amount to be reflected in blank (1) will be:

Following is their Profit & Loss Appropriation Account.

Particulars	(₹)	Particulars	(₹)
To Interest on Capital		By Profit & loss account (After manager’s commission)	___(2)___
Richa	______
Anmol	______
To Anmol’s Salary a/c	12,500
To Profit transferred to:
Richa’s Capital A/C (1)	___(1)___
Anmol’s Capital A/c	______
	______		______

The amount to be reflected in blank (2) will be:

Ramesh and Suresh Were Partners in a Firm Sharing Profits in the Ratio of Their Capitals Contributed on Commencement of Business Which Were Rs 80,000 and Rs 60,000 Respectively.

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Ramesh and Suresh Were Partners in a Firm Sharing Profits in the Ratio of Their Capitals Contributed on Commencement of Business Which Were Rs 80,000 and Rs 60,000 Respectively.

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