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Question
Rishi is a partner in a firm. He withdrew the following amounts during the year ended March 31, 2018.
| May 01, 2017 | Rs 12,000 |
| July 31, 2017 | Rs 6,000 |
| September 30, 2017 | Rs 9,000 |
| November 30, 2017 | Rs 12,000 |
| January 01, 2018 | Rs 8,000 |
| March 31, 2018 | Rs 7,000 |
Interest on drawings is charged @ 9% p.a. Calculate interest on drawings.
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Solution
Product Method
|
|
Drawings × Period |
Product |
|
01 May, 2017 to 31 March 2018 |
12,000 × 11 = |
1,32,000 |
|
31 July, 2017 to 31 March 2018 |
6,000 × 8 = |
48,000 |
|
30 September, 2017 to 31 March 2018 |
9,000 × 6 = |
54,000 |
|
30 Nov. 2017 to 31 March 2018 |
12,000 × 4 = |
48,000 |
|
01 Jan. 2018 to 31 March 2018 |
8,000 × 3 = |
24,000 |
|
31 March 2018 to 31 March 2018 |
7,000 × 0 = |
0 |
|
|
Sum of Product |
3,06,000 |
Here the formula will be
Interest on Drawings = Product × `Rate/100` x `1/2`
= 3,06,000 × `9/100 xx 1/12`
= Rs 2,295
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Sukesh (Rs) |
Verma* (Rs) |
|
Capital Accounts |
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Current Accounts |
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Liabilities |
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Amount (Rs.) |
Assets |
Amount (Rs.) |
Amount (Rs.) |
|
Mannu’s Capital |
30,000 |
40,000 | Drawings: | 6,000 | |
|
Shristhi’s Capital |
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Rakesh |
Month |
Rs. |
|
|
May 31, 2019 |
600 |
|
|
June 30, 2019 |
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|
|
August 31, 2019 |
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November 1, 2019 |
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December 31, 2019 |
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January 31, 2020 |
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March 01, 2020 |
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Rohan |
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|
Balance Sheet as at March 31, 2017 |
|||
|
|
Amount |
|
Amount |
|
Liabilities |
Rs |
Assets |
Rs |
|
Neelkant’s Capital |
10,00,000 |
Sundry Assets |
30,00,000 |
|
Mahadev’s Capital |
10,00,000 |
|
|
|
Neelkant’s Current Account |
1,00,000 |
|
|
|
Mahadev’s Current Account |
1,00,000 |
|
|
|
Profit and Loss Apprpriation |
|
|
|
|
(March 2017) |
8,00,000 |
|
|
|
|
30,00,000 |
|
30,00,000 |
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|
|
Rs |
|
February 01 |
4,000 |
|
May 01 |
10,000 |
|
June 30 |
4,000 |
|
October 31 |
12,000 |
|
December 31 |
4,000 |
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Pick the odd one out:
Identify the journal entry for transferring interest on drawings to the Profit and Loss Appropriation A/c.
Pick the odd one out:
Read the following information and answer the given question:
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| 1. | Gain on sale of fixed tangible assets | 12,50,000 |
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| 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 |
Operating profit before working capital changes will be ₹ ______.
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 |
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| 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 from operating activities before tax will be ₹ ______.
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| 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 | ______ | ||
| ______ | ______ |
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| 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:
