Question 43 Chapter 2 - Unimax Class 12 Part 1 - 2021

Question 43 Chapter 2 - Unimax Class 12 Part 1

43. Ravish and Sanchit were partners in a firm sharing profits in ratio of 3 : 2. On 1st April, 2020 their capitals were Rs. 160000 and Rs. 75000. On 1st July, 2020 they decided that their total capital (fixed) should be Rs. 250000. It war further decided that the capital (fixed) should be in their profit sharing ratio. Accordingly they introduced or withdrew the necessary Capital. The partnership deed provides the following :
(i) Interest on Capital @ 10% per annum.
(ii) Interest on Drawings @ 6% per annum.
(iii) Ravish is entitled to annual Salary Rs. 6000.
(iv) Sanchit is entitled to a salary of Rs. 600 per month.
Drawings of Ravish and Sanchit were Rs. 60000 and Rs. 90000 for year ended March 31st, 2021. The profit earned by the firm for year ended 31st March, 2021 was Rs. 125000. 10% of this profit was to be kept in a reserve.
You are required to prepare :
(i) Profit and Loss Appropriation Account.
(ii) Partners’ Capital Accounts.
(iii) Partners’ Current Account.

The solution of Question 43 Chapter 2 - Unimax Class 12 Part 1:

Profit & Loss of Appropriation A/c of firm For the year ended 31st March., 2021

Particulars		Rs.	Particulars		Rs.
To Reserve (Rs. 125000 x 10/100)		12500	By Net Profit b/d		125000
To Ravish (Salary)		6000	By Interest on Drawings A/c
To Sanchit (Salary) (Rs. 600 x 12)		7200	Ravish	1800
To Interest on Capital A/c			Sanchit	2700	4500
Ravish	15250
Sanchit	9375	24625
To Profit transferred
Ravish (3/5)	47505
Sanchit (3/5)	31670	79175
		129500			129500

Partner’s Capital Accounts

Date	Particulars	Ram	Gopal	Date	Particulars	Ram	Gopal
1-7-20	To Bank A/c	10000	-	1-4-2020	By Balance b/d	160000	75000
31-3-21	To Balance c/d	150000	100000	1-7-2020	By Bank A/c		25000
		100000	100000			160000	100000
				1-4-2021	By Balance b/d	150000	100000

Partner’s Current Accounts

Particulars	Ram	Gopal	Particulars	Ram	Gopal
To Drawings A/c	60000	90000	By Interest on Capital A/c	15250	9375
To Interest Drawings A/c	1800	2700	By Salaries A/c	6000	9375
To Balance c/d			By Profit & Loss App (profit)	47505	31670
			By Balance c/d		44455
	68755	92700		68755	92700
To Balance b/d		44455	By Balance b/d	6955

Working Notes :
(1) Calculation of further capital to be introduced or withdrawn by partners as on July 1, 2020
Capital fixed by Partners : Rs. 250000
Profit Sharing Ratio : 3 : 2

	Ravish (Rs.)	Sanchit (Rs.)
New capital as per profit
Sharing ratio	150000	100000
	(250000 x 3/5)	(250000 x 2/5)
Less Existing Capital	160000	75000
Caption to be introduced (Withdrown)	(10000)	25000

(2) Calculation of Interest on Capital

Ravish
Amount Invested (Rs.)	No. of Months	Product
160000	3	480000
150000	9	1350000
		1830000

1830000 x 10/100 x 1/12 = Rs. 15250

Sanchit
Amount Invested (Rs.)	No. of Months	Product
75000	3	225000
100000	9	900000
		1125000

1125000 x 10/100 x 1/12 = Rs. 9375

(3) Calculation of Interest on Drawings
Ravish : Rs. 60000 x 6/100 x 6/12 = Rs. 1800
Sanchit : Rs. 90000 x 6/100 x 6/12 = Rs. 2700

https://tutorstips.com/what-is-partnership/

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication