CHAPTER 1: PARTNERSHIP – BASIC CONCEPTS
Multiple Choice Questions (1 Mark Each)
1. Identify the name of account which is prepared to show how the profits are distributed among partners
a) Income & Expenditure a/c b) Profit & Loss a/c c) Profit & Loss appropriation a/c d) None of these
(2019 Mar and 2020 Say - 1 Mark)
2. Under fixed capital method, the interest on drawings is :
(a) credited to capital account (b) debited to capital account (c) credited to current account (d) debited to current account
(2019- Say -1 Mark)
3. A Partnership firm incurs a loss of Rs. 28,000 during the year 2018-19. Which of the following is admissible to partners at the end of this year ?
(a) Interest on partners Loan (b) Interest on partners Capital (c) Commission to partners (d) Salary to Partners
(2020- Mar -1 Mark)
4. The written agreement of partnership is called ______.
(a) Articles of Association (b) Memorandum of Association (c) Partnership Deed (d) None of these
(2021 Mar -1 Mark)
5. Under fixed capital method, the interest on capital is credited to ……..
a) Partner's capital a/c b) Partner's current a/c c) Bank a/c d) Profit & Loss appropriation a/c
(2021 Say – 1 Mark)
6. Under fixed capital method of maintaining capital accounts, yearly adjustment are transferred to partner's ______.
(a) Capital Account (b) Current Account (c) Loan Account (d) Cash Account
(2022- Mar -1 Mark)
7. Arun and Babu are partners in a firm sharing profit and losses in the ratio of 3 : 2. They admitted Chandu as a partner for 1/6 share with a guaranteed minimum profit of Rs.15,000. The Net profit of the firm for the year ending 31st March, 2021 was Rs.60,000. Chandu's share of profit will be :
(a) Rs.10,000 (b) Rs.15,000 (c) Rs.20,000 (d) Rs.30,000
(2022- Mar -1 Mark)
8. A & B are partners in a firm sharing profits and losses in the ratio of 2:1. They admit C as a partner for 1/4 share in profit with a guaranteed minimum profit of Rs.10,000. The net profit of the firm after C's admission is Rs.30,000. C will get a profit of ______.
(a) Rs.7,500 (b) Rs.10,000 (c) Rs.5,000 (d) Rs.15,000
(2022- Say -1 Mark)
9. Partners are entitled to get ______ in the absence of an agreement.
(a) Salary (b) Share of Profit in capital ratio (c) Interest on Partners loan @ 6% p.a. (d) Commission
(2022- Say -1 Mark)
10. Under fixed capital method, all adjustments relating to partners capital are shown in ______.
(a) Current A/c (b) Capital A/c (c) Profit & Loss Appropriation A/c (d) Profit & Loss A/c
(2023 Mar-1 Mark)
11. ______ shows how the profit or loss are appropriated or distributed among the partners.
(a) Partners Capital Account (b) Current Account (c) Profit/Loss Appropriation Account (d) Profit/Loss Account
(2023 Say – 1 Mark)
12. Under fixed capital method, partner's commission is credited to ______.
(a) Current A/c (b) Capital A/c (c) Revaluation A/c (d) Realisation A/c
(2024 Mar-1 Mark)
13. Partner's Commission is credited to ______
(a) Profit & Loss A/c. (b) Profit & Loss Appropriation A/c. (c) Profit & Loss Adjustment A/c. (d) Partner's Capital A/c.
(2024 Say-1 Mark)
14. A liability not included in the books of accounts is discovered at the time of admission of a partner. This liability will be :
(a) Debited to the Revaluation Account (b) Credited to the Revaluation Account (c) Debited to the Partners' Capital Accounts (d) Credited to the Partners' Capital Accounts
(2025 Mar-1 Mark)
15. Which of the following is true about interest on partner's loan ?
(a) It will not be allowed in the absence of Partnership deed. (b) It is debited to the Profit and Loss Account. (c) It is allowed only if the firm has profit. (d) It is credited to the Profit and Loss Appropriation Account.
(2025 Mar-1 Mark)
16. The account prepared to distribute partners salary, commission, profit or loss etc. is ______
a) Capital a/c b) Profit and Loss a/c c) Profit and Loss Appropriation a/c d) Realisation a/c
(2025 Say-1 Mark)
Short Answer Questions (2 Marks)
17. Under fixed capital method, the interest on drawings is :
(a) credited to capital account (b) debited to capital account (c) credited to current account (d) debited to current account
(2019 Say- 2 Marks)
18. A Partnership firm incurs a loss of Rs.28,000 during the year 2018-19. Which among the following is admissible to partners at the end of this year ?
(a) Interest on partners Loan (b) Interest on partners Capital (c) Commission to partners (d) Salary to Partners
(2020 Mar- 2 Marks)
19. Madhu a partner withdrew Rs. 1,100 per month for his personal use during the year ending 31st December, 2017. Calculate interest on his drawings at 10% p.a. when the amount is withdrawn on the first day of every month.
(2020 Say- 2 Marks)
Total drawings = 1,100 × 12 = Rs.13,200
Period = 6.5 months (average)
Interest = 13,200 × 10% × 6.5/12 = Rs.715
20. How will you treat the following items in partnership accounts in the absence of partnership deed ?
(a) Profit Sharing Ratio (b) Interest on Drawings
(2021 Mar- 2 Marks)
| Item | Treatment in absence of partnership deed |
|---|---|
| (a) Profit Sharing Ratio | Equally |
| (b) Interest on Drawings | Not charged |
21. List out any four items appearing in the credit side of Partners Capital Account, when capitals are fluctuating.
(2023 Mar – 2 Marks)
| S.No. | Items appearing in credit side of Partners Capital Account |
|---|---|
| 1. | Opening balance |
| 2. | Interest on capital |
| 3. | Salary to partner |
| 4. | Share of profit |
| 5. | Commission to partner |
22. Sabir a partner in a firm withdraws Rs.3,000 at the beginning of each month for 12 months. Calculate interest on drawings if the rate of interest on drawings is 10% p.a.
(2023 Say – 2 Marks)
Total drawings = 3,000 × 12 = Rs.36,000
Period = 6.5 months (average)
Interest = 36,000 × 10% × 6.5/12 = Rs.1,950
23. Write the provisions applicable in the absence of partnership deed.
(a) Profit sharing ratio : ______ (b) Interest on loan : ______
(2024 Mar – 2 Marks)
| Item | Provision in absence of partnership deed |
|---|---|
| (a) Profit sharing ratio | Equally |
| (b) Interest on loan from partner | 6% p.a. |
24. List out any four contents of Partnership Deed.
(2024 Say – 2 Marks)
| S.No. | Contents of Partnership Deed |
|---|---|
| 1. | Name of the firm |
| 2. | Names of partners |
| 3. | Profit sharing ratio |
| 4. | Interest on capital |
| 5. | Salary to partners |
25. State any two distinction between Fixed Capital and Fluctuating Capital methods of preparing partners' capital accounts.
(2025 Mar – 2 Marks)
| Fixed Capital Method | Fluctuating Capital Method |
|---|---|
| 1. Capital account remains unchanged | 1. Capital account changes with all transactions |
| 2. Separate current account is maintained for adjustments | 2. All adjustments are made in the capital account itself |
26. Syam and Sanal are equal partners with capitals of Rs.50,000 and Rs.40,000 respectively as on April 01, 2023. Calculate the interest on capital admissible to Syam and Sanal @ 10% per annum for the year ending March 31, 2024 under the following situations :
(i) If the firm earned a profit of Rs.20,000 during the year
(ii) If the firm incurred a loss of Rs.5,000 during the year
(2025 Mar – 2 Marks)
(i) Interest = Syam: 50,000 × 10% = Rs.5,000; Sanal: 40,000 × 10% = Rs.4,000
(ii) Same calculation as above, but payable only if partnership deed allows interest on capital even in case of loss.
27. Write down any two differences between fixed capital method and fluctuating capital method.
(2025 Say – 2 Marks)
| Fixed Capital Method | Fluctuating Capital Method |
|---|---|
| 1. Maintains two accounts (capital and current) | 1. Maintains only one capital account |
| 2. Capital balance remains fixed unless additional capital is introduced or withdrawn | 2. Capital balance changes with every adjustment |
28. Navami and Jyothi are partners in a firm. They did not have any partnership agreement. How the following situations are treated :
a) Interest on loan given by Navami to the firm.
b) Interest on drawings taken by Jyothi.
(2025 Say – 2 Marks)
| Situation | Treatment in absence of partnership deed |
|---|---|
| a) Interest on loan given by Navami to the firm | Allowed @ 6% p.a. |
| b) Interest on drawings taken by Jyothi | Not charged |
Short Answer Questions (3 Marks)
29. Renjith is a partner in a firm. On 1st January 2017, his capital account balance was Rs.2,20,000. As per partnership agreement a partner is entitled to 6% interest per annum on his capital. Renjith introduced additional capital of Rs.80,000 on 01-07-2017 and withdrew Rs.50,000 on 01-10-2017. Calculate the interest on capital for the year ending 31st December 2017.
(2020 Mar- 3 Marks)
1st Jan to 30th June: 2,20,000 × 6% × 6/12 = Rs.6,600
1st July to 30th Sept: 3,00,000 × 6% × 3/12 = Rs.4,500
1st Oct to 31st Dec: 2,50,000 × 6% × 3/12 = Rs.3,750
Total interest = 6,600 + 4,500 + 3,750 = Rs.14,850
30. What are the two methods of maintaining Capital Accounts of partners ? Give any four differences between these two methods.
(2020 Say- 3 Marks)
| Basis | Fixed Capital Method | Fluctuating Capital Method |
|---|---|---|
| 1. Number of accounts | Two accounts (capital and current) | Only one capital account |
| 2. Capital balance | Remains fixed | Changes with transactions |
| 3. Adjustments | Made in current account | Made in capital account |
| 4. Interest on capital/drawings | Credited/debited to current account | Credited/debited to capital account |
31. Mr. Rajeev, a partner in a firm withdrew Rs.2,000 each every month from the firm. Calculate the amount of interest on drawings @ 8% per annum, assuming that he withdraws the amount :
(a) at the beginning of each month. (b) at the end of each month.
(2022 Mar- 3 Marks)
(a) Beginning of month: Total drawings = 24,000; Period = 6.5 months; Interest = 24,000 × 8% × 6.5/12 = Rs.1,040
(b) End of month: Total drawings = 24,000; Period = 5.5 months; Interest = 24,000 × 8% × 5.5/12 = Rs.880
32. Complete the following table with regard to the provisions applicable in the absence of partnership deed on the basis of the hint given :
Hint : Interest on capital - No
(a) Sharing of Profits and Losses
(b) Interest on drawings
(c) Interest on loan from a partner
(d) Remuneration to partner
(2022 Mar- 3 Marks)
| Item | Provision in absence of partnership deed |
|---|---|
| Interest on capital | No |
| (a) Sharing of Profits and Losses | Equally |
| (b) Interest on drawings | Not charged |
| (c) Interest on loan from a partner | 6% p.a. |
| (d) Remuneration to partner | Not allowed |
33. Akhil, a partner in a firm withdrew the following amounts during the year ended March 31, 2021 for his personal use.
| Date of withdrawal | Amount |
|---|---|
| April 30, 2020 | 7,000 |
| Sept. 30, 2020 | 4,000 |
| Dec. 1, 2020 | 5,000 |
Calculate the amount of interest on drawings to be charged from Akhil, if the rate of interest is at 8% p.a.
(2022 Say- 3 Marks)
April 30: 7,000 × 8% × 11/12 = Rs.513.33
Sept 30: 4,000 × 8% × 6/12 = Rs.160
Dec 1: 5,000 × 8% × 4/12 = Rs.133.33
Total interest = Rs.806.66 (approx. Rs.807)
34. Santhosh and Suresh are partners in a firm. Their capital accounts showed a balance of Rs.50,000 and Rs.40,000 as on 01/04/2020. Santhosh introduced an additional capital of Rs.10,000 on 01/07/2020 and Suresh Rs.5,000 on 01/01/2021. Calculate partners interest on capital @ 6% p.a. for the year ended 31/03/2021.
(2022 Say- 3 Marks)
Santhosh: (50,000 × 6% × 12/12) + (10,000 × 6% × 9/12) = 3,000 + 450 = Rs.3,450
Suresh: (40,000 × 6% × 12/12) + (5,000 × 6% × 3/12) = 2,400 + 75 = Rs.2,475
35. Raheem and Saleem are partners in a firm. They share profits equally. Their monthly drawings are Rs.2,500 each. Interest on drawings is charged at 12% p.a. Calculate interest on Raheem's drawings for the year 2022, assuming that the drawings are made : (i) in the beginning of every month (ii) in the middle of every month, and (iii) at the end of every month
(2023 Mar – 3 Marks)
(i) Beginning: 30,000 × 12% × 6.5/12 = Rs.1,950
(ii) Middle: 30,000 × 12% × 6/12 = Rs.1,800
(iii) End: 30,000 × 12% × 5.5/12 = Rs.1,650
36. State any three differences between fixed capital method and fluctuating capital method.
(2023 Say – 3 Marks)
| Fixed Capital Method | Fluctuating Capital Method |
|---|---|
| 1. Maintains two accounts | 1. Maintains only one account |
| 2. Capital balance remains unchanged unless additional capital is introduced or withdrawn | 2. Capital balance changes with every transaction |
| 3. Adjustments like interest, salary, etc. are made in current account | 3. All adjustments are made in capital account |
37. Write any three differences between fixed capital and fluctuating capital methods.
(2024 Mar – 3 Marks)
| Fixed Capital Method | Fluctuating Capital Method |
|---|---|
| 1. Capital account balance remains fixed | 1. Capital account balance fluctuates |
| 2. Requires current account for adjustments | 2. No separate current account needed |
| 3. Capital account shows only capital introduced/withdrawn | 3. Capital account shows all transactions |
38. Mohan is a partner in a firm. He withdrew the following amounts during the year 2023 :
| Date | Amount |
|---|---|
| February 01 | 4,000 |
| May 01 | 10,000 |
| June 30 | 4,000 |
| October 31 | 12,000 |
| December 31 | 4,000 |
Interest on drawings is to be charged @ 7 ½ % p.a.
Calculate the amount of interest to be charged on Mohan's drawings for the year ending December 31, 2023.
(2024 Say – 3 Marks)
Feb 1: 4,000 × 7.5% × 11/12 = Rs.275
May 1: 10,000 × 7.5% × 8/12 = Rs.500
June 30: 4,000 × 7.5% × 6/12 = Rs.150
Oct 31: 12,000 × 7.5% × 2/12 = Rs.150
Dec 31: 4,000 × 7.5% × 0/12 = Rs.0
Total interest = Rs.1,075
39. Mani a partner in a firm withdrew the following amounts during the year 2022-23 :
| Date of withdrawal | Amount |
|---|---|
| May 01, 2022 | 5,000 |
| July 01, 2022 | 3,000 |
| November 30, 2022 | 6,000 |
| December 31, 2022 | 2,000 |
| March 31, 2023 | 3,000 |
Calculate the amount of interest on drawings to be charged from Mani @ 8% p.a.
Books are closed on 31st March every year.
(2025 Mar – 3 Marks)
May 1: 5,000 × 8% × 11/12 = Rs.366.67
July 1: 3,000 × 8% × 9/12 = Rs.180
Nov 30: 6,000 × 8% × 4/12 = Rs.160
Dec 31: 2,000 × 8% × 3/12 = Rs.40
Mar 31: 3,000 × 8% × 0/12 = Rs.0
Total interest = Rs.746.67 (approx. Rs.747)
40. Ajay, Sachin and Dravid are partners sharing profits in the ratio of 2:1:1. Their capitals as on April 01, 2023 were, Ajay Rs.1,00,000, Sachin Rs.60,000 and Dravid Rs.40,000. After the final accounts for the year 2023-2024 have been prepared, it was discovered that interest on partners' capital @ 10 % p.a. has not been recorded in the books of accounts. Give necessary adjusting journal entry.
(2025 Mar – 3 Marks)
Interest calculation:
Ajay: 1,00,000 × 10% = Rs.10,000
Sachin: 60,000 × 10% = Rs.6,000
Dravid: 40,000 × 10% = Rs.4,000
Total = Rs.20,000
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Ajay's Capital A/c | 10,000 | By Balance b/d | 20,000 | ||||
| To Sachin's Capital A/c | 6,000 | ||||||
| To Dravid's Capital A/c | 4,000 | ||||||
| Total | 20,000 | Total | 20,000 | ||||
41. Avanthika a partner withdraws a sum of Rs. 20,000 quarterly during 2023-24. The interest is to be charged on drawings @ 8% p.a. Calculate interest on drawings, if the amount is withdrawn at the beginning of each quarter.
(2025 Say – 3 Marks)
Average period = 7.5 months (for beginning of quarter)
Interest = 80,000 × 8% × 7.5/12 = Rs.4,000
42. On April 1, 2024 A, B and C entered into partnership contributing Rs. 50,000, Rs. 40,000, Rs. 30,000 as capital and sharing profit in the ratio of 3 : 2 : 1. 'A' is entitled to get a salary of Rs. 12,000. Interest on capital is at 6% p.a. The net profit for the year ending 31st March 2023 was Rs. 42,000. Prepare Profit and Loss Appropriation Account.
(2025 Say – 3 Marks)
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Salary A/c (A) | 12,000 | By Net Profit | 42,000 | ||||
| To Interest on Capital: A: 50,000 × 6% = 3,000 B: 40,000 × 6% = 2,400 C: 30,000 × 6% = 1,800 |
7,200 | ||||||
| To Net profit transferred to: A: (22,800 × 3/6) = 11,400 B: (22,800 × 2/6) = 7,600 C: (22,800 × 1/6) = 3,800 |
22,800 | ||||||
| Total | 42,000 | Total | 42,000 | ||||
Long Answer Questions (4-5 Marks)
43. Write any 4 differences between fixed capital and fluctuating capital methods.
(2021 Mar and 2021 Say - 4 Marks)
| Basis of Difference | Fixed Capital Method | Fluctuating Capital Method |
|---|---|---|
| 1. Number of accounts | Two accounts are maintained (capital and current) | Only one capital account is maintained |
| 2. Capital account balance | Remains unchanged unless additional capital is introduced or withdrawn | Changes with every transaction |
| 3. Recording of adjustments | Adjustments like interest, salary, drawings etc. are recorded in current account | All adjustments are recorded in capital account |
| 4. Nature of account | Capital account shows only permanent capital | Capital account shows the net effect of all transactions |
44. Reena and Rehna are partners in a firm sharing profits and losses in the ratio of 3 : 2 with capitals of Rs.5,00,000 and Rs.4,00,000 respectively. The profit of the firm for the year ended March 31, 2021 was Rs.1,00,000. Interest on capital is to be allowed at 5% p.a. Reena is to be paid a salary of Rs.2,500 per month. Prepare the Profit and Loss Appropriation Account to show the distribution of profit among the partners.
(2022 Say- 4 Marks)
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Salary (Reena: 2,500 × 12) | 30,000 | By Net Profit | 1,00,000 | ||||
| To Interest on Capital: Reena: 5,00,000 × 5% = 25,000 Rehna: 4,00,000 × 5% = 20,000 |
45,000 | ||||||
| To Net profit transferred to: Reena: (25,000 × 3/5) = 15,000 Rehna: (25,000 × 2/5) = 10,000 |
25,000 | ||||||
| Total | 1,00,000 | Total | 1,00,000 | ||||
45. Priya is a partner in a firm. Her capital at the end of the financial year 2016-17 was Rs.2,00,000. During the year she had withdrawn Rs.30,000. Her share of profit before charging interest on capital for the year was Rs.8,000. Calculate interest on capital @ 10 % p.a.
(2019 Mar -5 Marks)
Opening capital = Closing capital + Drawings - Profit - Additional capital (if any)
Assuming no additional capital:
Opening capital = 2,00,000 + 30,000 - 8,000 = Rs.2,22,000
Interest on capital = 2,22,000 × 10% = Rs.22,200
46. Roy and Sara are partners sharing profits and losses in the ratio of 2:1. The following details are also available.
| Particulars | Roy | Sara |
|---|---|---|
| Capital | 1,00,000 | 70,000 |
| Salary (per month) | 800 | 700 |
| Interest on Capital | 8% | 8% |
| Drawings | 8,000 | 4,500 |
| Interest on drawings | 500 | 350 |
Profit during the year amounts to Rs.60,000. Prepare partners capital accounts, assuming that capitals are fluctuating.
(2019 Say -5 Marks)
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Drawings | 8,000 | 01/04/2019 | By Balance b/d | 1,00,000 | |||
| To Interest on Drawings | 500 | By Interest on Capital | 8,000 | ||||
| To Balance c/d | 1,28,600 | By Salary | 9,600 | ||||
| By Share of Profit | 19,500 | ||||||
| Total | 1,37,100 | Total | 1,37,100 | ||||
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Drawings | 4,500 | 01/04/2019 | By Balance b/d | 70,000 | |||
| To Interest on Drawings | 350 | By Interest on Capital | 5,600 | ||||
| To Balance c/d | 88,900 | By Salary | 8,400 | ||||
| By Share of Profit | 9,750 | ||||||
| Total | 93,750 | Total | 93,750 | ||||
47. Rajeev and Pradeep are partners in a firm sharing profits and losses in the ratio of 2:1. On 1st April 2019, their capitals were Rs.5,00,000 and Rs.3,00,000 respectively. Prepare the capital accounts of the partners on 31st March ,2020 under fluctuating capital method.
| Particulars | Rajeev | Pradeep |
|---|---|---|
| Interest on capital | 8% | 8% |
| Drawings during the year | 10,000 | 8,000 |
| Interest on drawings | 1,000 | 800 |
| Salary | 7,000 | - |
| Commission | - | 5,000 |
Profit for the year after making all the adjustments was Rs. 24,000
(2021 say – 5 Marks)
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Drawings | 10,000 | 01/04/2019 | By Balance b/d | 5,00,000 | |||
| To Interest on Drawings | 1,000 | By Interest on Capital | 40,000 | ||||
| To Balance c/d | 5,52,000 | By Salary | 7,000 | ||||
| By Share of Profit | 16,000 | ||||||
| Total | 5,63,000 | Total | 5,63,000 | ||||
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Drawings | 8,000 | 01/04/2019 | By Balance b/d | 3,00,000 | |||
| To Interest on Drawings | 800 | By Interest on Capital | 24,000 | ||||
| To Balance c/d | 3,28,200 | By Commission | 5,000 | ||||
| By Share of Profit | 8,000 | ||||||
| Total | 3,37,000 | Total | 3,37,000 | ||||
48. Rajan and Sajan are partners in a firm sharing profits and losses in the ratio of 2 : 1. Their capital balance as on 01-04-2022 was Rs.4,00,000 and Rs. 3,00,000 respectively. The partnership deed provides that Rajan is to be paid a salary of Rs. 2,000 per month and Sajan is to get a commission of Rs. 10,000 for the year. Interest on capital is to be allowed at 8% p.a. The drawings of Rajan and Sajan for the year were Rs.30,000 and Rs.10,000 respectively. Interest on Rajan's drawings was Rs.750 and on Sajan's drawings, Rs.250. The Net Profit of the firm before making these adjustments was Rs.1,82,000. Prepare Profit and Loss Appropriation Account.
(2023 Mar-5 Marks)
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Salary (Rajan: 2,000 × 12) | 24,000 | By Net Profit b/d | 1,82,000 | ||||
| To Commission (Sajan) | 10,000 | By Interest on Drawings: | |||||
| To Interest on Capital: Rajan: 4,00,000 × 8% = 32,000 Sajan: 3,00,000 × 8% = 24,000 |
56,000 | Rajan | 750 | ||||
| To Share of Profit: Rajan (2/3) |
62,000 | Sajan | 250 | ||||
| Sajan (1/3) | 31,000 | ||||||
| Total | 1,83,000 | Total | 1,83,000 | ||||
49. Joy and Vinod are partners sharing profits in the ratio 3 : 2 with a capital of Rs.50,000 and Rs.30,000 respectively. Interest on capital at 6% p.a. Vinod is entitled to a monthly salary of Rs.250. The drawings of Joy and Vinod were Rs.8,000 and Rs.4,000 respectively. Interest on drawings Joy – Rs.600 Vinod – Rs.400. The profit of the firm before the above adjustments were Rs.15,000. Prepare Profit/Loss Appropriation Account.
(2023 Say- 5 Marks)
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Salary (Vinod: 250 × 12) | 3,000 | By Net Profit | 15,000 | ||||
| To Interest on Capital: Joy: 50,000 × 6% = 3,000 Vinod: 30,000 × 6% = 1,800 |
4,800 | ||||||
| To Net profit transferred to: Joy: (7,200 × 3/5) = 4,320 Vinod: (7,200 × 2/5) = 2,880 |
7,200 | ||||||
| Total | 15,000 | Total | 15,000 | ||||
50. Calculate interest on capital @ 6% p.a. from the following data. Account year ended on 31st December 2023 :
| Particulars | Amal | Bimal |
|---|---|---|
| Account balance on 01/01/2023 | 40,000 | 30,000 |
| Additional capital on 01/05/2023 | 20,000 | 30,000 |
| Withdrawals on 01/10/2023 | 10,000 | nil |
(2024 Mar-5 Marks)
Amal: (40,000 × 6% × 4/12) + (60,000 × 6% × 5/12) + (50,000 × 6% × 3/12) = 800 + 1,500 + 750 = Rs.3,050
Bimal: (30,000 × 6% × 4/12) + (60,000 × 6% × 8/12) = 600 + 2,400 = Rs.3,000
51. (a) Explain briefly Profit and Loss Appropriation A/c.
(b) Ajay, Vijay and Sooraj are partners sharing profits and losses in the ratio of 3 : 2 : 1. Sooraj's share in profit is guaranteed by Ajay and Vijay at a fixed minimum of Rs.8,000. The Net Profit for the year ended 31st December, 2023 was Rs.36,000. Prepare Profit and Loss Appropriation A/c.
(2024 Say-5 Marks)
| Dr. | Cr. | ||||||
|---|---|---|---|---|---|---|---|
| Date | Particulars | 3.F | Amount | Date | Particulars | 3.F | Amount |
| To Net profit transferred to: Ajay: (36,000 × 3/6) - 2,000 = 16,000 Vijay: (36,000 × 2/6) - 1,000 = 11,000 Sooraj: (36,000 × 1/6) + 3,000 = 9,000 |
36,000 | By Net Profit | 36,000 | ||||
| Total | 36,000 | Total | 36,000 | ||||