## Question 92 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 92 Chapter 2 of +2-A

92. Three Chartered Accountants A, B and C form a partnership, profits being shared in the ratio of
3 : 2: 1 subject to the following:

1. C’s share of profit guaranteed to be not less than 15,000 p.a.
2. B gives a guarantee to the effect that gross fee earned by him for the firm shall be equal to his average gross fee of the preceding five years when he was carrying on profession alone, which on an average works out at 25,000.
The profit for the first year of the partnership are 75,000. The gross fee earned by B for the firm is 16,000. You are required to show Profit and Loss Appropriation Account after giving
effect to the above

The solution of Question 92 Chapter 2 of +2-A

:

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount By Profit and Loss A/c 75,000 By B’s Capital A/c (Deficiency in Revenue) 9,000 To Profit Transferred to *2 A’s Capital A/c 41,400 B’s Capital A/c 27,600 C’s Capital A/c 15,000 84,000 84,000 84,000

Profit of the year =84,000
Profit-sharing Ratio =3 : 2: 1

 A’s Share of Profit 84,000 X 3 6

A’s Share of Profit= 42,000

 B’s Share of Profit 84,000 X 2 6

B’s Share of Profit = 28,000

 C’s Share of Profit 84,000 X 1 6

C’s Share of Profit = 14,000

C’s Minimum Guaranteed Profit = Rs 15,000
C’s Actual Profit Share i.e. 14,000 is less than his Minimum Guaranteed Profit i.e. 15,000
Deficiency in Alia’s Profit Share = 15,000 − 14,000= Rs 1,000

This deficiency of Rs 20,000 is to be borne by A and B in the ratio of 3: 2

 A’s Share of Profit 1,000 X 3 5

A’s Share of Profit  = 600

 B’s Share of Profit 1,000 X 2 5

B’s Share of Profit  = 400

Now, Final distributed among the partners

 A’s Share of Profit = 42,000 – 600 =41,400 B’s Share of Profit = 28,000 – 400 =27,600 C’s Share of Profit = 14,000 + 1,000 =15,000

Note: – In the book, they have shown the net share of final profit to B is Rs 18,600 (27,600- 9,000), So, we have shown it in the solution of Rs 27,600. The deficiency of Rs 9,000 that was guaranteed by B to the firm would not be deducted from his share as he is bearing it in the form of profit.

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 91 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 91 Chapter 2 of +2-A

91. The partners of a firm, Alia, Bhanu and Chand distributed the profits for the year ended 31st March 2017, 80,000 in the ratio of 3 : 3: 2 without providing for the following adjustments:
a Alia and Chand were entitled to a salary of 1,500 each p.a.
b Bhanu was entitled for a commission of 4,000.
c Bhanu and Chand had guaranteed a minimum profit of 35,000 p.a. to Alia any deficiency to borne equally by Bhanu and Chand.
Pass the necessary journal entry for the above adjustments in the books of the firm. Show workings clearly.

The solution of Question 91 Chapter 2 of +2-A

:

 Date Particulars L.F. Debit Credit Chand’s Capital A/c *1 Dr 21,000 Bhanu’s Capital A/c *1 Dr 2,000 To Alia’s Capital A/c 23,000 (Being adjustment made for deficiency of R’s Capital)

 Statement Showing Adjustment of Profit required Particulars Alia’s Bhanu’s Chand’s Total Salary to be paid 18,000 – 18,000 36,000 Add: Commission to be paid – 4,000 – 4,000 Add: Profit to be Credited 35,000 5,000 – 40,000 Total Amount to be credited 53,000 9,000 18,000 80,000 Less: Profit Already credited (2:2:1) 30,000 30,000 20,000 80,000 23,000 – 21,000 – 2,000 – Alia’s get less amount, so we have to credit his capital a/c with difference amount Bhanu’s get extra so we have to debit his capital a/c with difference amount Chand’s get extra so we have to debit his capital a/c with difference amount

Profit of the year =40,000
Profit-sharing Ratio =3 : 3 : 2

 Alia’s Share of Profit 40,000 X 3 8

Alia’s Share of Profit  = 15,000

 Bhanu’s Share of Profit 40,000 X 3 8

Bhanu’s Share of Profit = 15,000

 Chand’s Share of Profit 40,000 X 2 8

Chand’s Share of Profit = 10,000
Alia’s Minimum Guaranteed Profit = Rs 35,000
Alia’s Actual Profit Share i.e. 15,000 is less than his Minimum Guaranteed Profit i.e. 35,000
Deficiency in Alia’s Profit Share = 35,000 − 15,000 = Rs 20,000
This deficiency of Rs 20,000 is to be borne by Bhanu and Chand in the ratio of 1: 1

 Bhanu’s Share of Profit 20,000 X 1 2

Bhanu’s Share of Profit= 10,000

 Chand’s Share of Profit 20,000 X 1 2

Chand’s Share of Profit = 10,000

Now, Final distributed among the partners

 Alia’s Share of Profit = 15,000 + 20,000 =35,000 Bhanu’s Share of Profit = 15,000 – 10,000 =5,000 Chand’s Share of Profit = 10,000 – 10,000 =Nil

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 90 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 90 Chapter 2 of +2-A

90. Ajay, Binay and Chetan were partners sharing profits in the ratio of 3 : 3: 2. The Partnership
The deed provided for the following:

1. Salary of 2,000 per quarter to Ajay and Binay.
2. Chetan was entitled to a commission of 8,000
3. Binay was guaranteed a profit of 50,000 p.a.
The profit of the firm for the year ended 31st March 2015 was 1,50,000 which was distributed among Ajay, Binay and Chetan in the ratio of 2 : 2: 1, without taking into consideration the
provisions of Partnership Deed. Pass necessary rectifying entry for the above adjustments in the books of the firm. Show your workings clearly.

The solution of Question 90 Chapter 2 of +2-A

:

 Date Particulars L.F. Debit Credit Ajay’s Capital A/c *1 Dr 6,400 Binay’s Capital A/c *1 Dr 2,000 To Chetan’s Capital A/c 8,400 (Being adjustment made for deficiency of R’s Capital)

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount To Salary By Profit and Loss A/c 1,50,000 Ajay’s Capital A/c 8,000 Binay’s Capital A/c 8,000 16,000 To Commission to Chetan 8,000 To Profit Transferred to *2 Ajay’s Capital A/c 45,600 Binay’s Capital A/c 50,000 Chetan’s Capital A/c 30,400 1,26,000 1,50,000 1,50,000

 Statement Showing Adjustment of Profit required Particulars Ajay Binay Chetan Total Salary to be paid 8,000 8,000 – 16,000 Add: Commission to be paid – – 8,000 8,000 Add: Profit to be Credited 45,600 50,000 30,400 1,26,000 Total Amount to be credited 53,600 58,000 38,400 1,26,000 Less: Profit Already credited (2:2:1) 60,000 60,000 30,000 1,50,000 – 6,400 – 2,000 8,400 – Ajay get extra so we have to debit his capital a/c with difference amount Binay get extra so we have to debit his capital a/c with difference amount Chetan get less amount, so we have to credit his capital a/c with difference amount

Profit of the year = 1,50,000
Profit-sharing Ratio = 2 : 2 : 1

 Ajay’s Share of Profit 1,50,000 X 2 5

Ajay’s Share of Profit = 60,000

 Binay’s Share of Profit 1,50,000 X 2 5

Binay’s Share of Profit = 60,000

 Chetan’s Share of Profit 1,50,000 X 1 5

Chetan’s Share of Profit = 30,000

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 89 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 89 Chapter 2 of +2-A

89. Ankur and Bobby were into the business of providing software solutions in India. They were sharing profits and losses in the ratio 3 : 2. They admitted Rohit for a 1/5 share in the firm. Rohit, an alumni or IIT, Chennai would help them to expand their business to various South African countries where he had been working earlier. Rohit is guaranteed a minimum profit of 2,00,000 for the year. Any deficiency in Rohit’s share is to be borne by Ankur and Bobby in the ratio 4 : 1. Loss for the year was 10,00,000. Pass the necessary Journal entries.

The solution of Question 89 Chapter 2 of +2-A

:

 Date Particulars L.F. Debit Credit Ankur’s Capital A/c*1 Dr 4,80,000 Bobby’s Capital A/c *1 Dr 3,20,000 Rohit’s Capital A/c *1 Dr 2,00,000 To Profit and Loss A/c 10,00,000 (Being loss for the year debited to Partners’ capital a/c) Ankur’s Capital A/c *2 Dr 3,20,000 Bobby’s Capital A/c *2 Dr 80,000 To Rohit’s Capital A/c 4,00,000 (Being adjustment made for deficiency of R’s Capital)

Working Note: –

Calculation of New Profit Sharing Ratio
Old Profit Sharing Ratio =3 : 2

Let assume the total share of the firm is equal to Re 1
Rohit’s admitted for share =1/5th share in profits

 Remaining share for Old Partners’= 1 – 1 5
 = 5 – 1 5
 = 4 5
 Ankur’s New Profit share = 4 X 3 5 5
 Ankur’s New Profit share 12 25

 Bobby’s New Profit share = 4 X 2 5 5
 Bobby’s New Profit share 8 25

 Rohit’s New Profit share = 1 X 5 5 5
 Rohit’s New Profit share 5 25

Old Profit Sharing Ratio = 12: 8: 5

*1 Calculation of Share of Profit/Loss

Loss of the year = 10,00,000

 Ankur’s Share of Profit 10,00,000 X 12 25

Ankur’s Share of Profit  = 4,80,000

 Bobby’s Share of Profit 10,00,000 X 8 25

Bobby’s Share of Profit = 3,20,000

 Rohit’s Share of Profit 10,00,000 X 5 25

Rohit’s Share of Profit = 2,00,000

*2 Calculation of Rohit Deficiency
Rohit’s Minimum Guaranteed Profit = Rs 2,00,000
Rohit’s Actual loss Share i.e. 2,00,000 is less than his Minimum Guaranteed Profit i.e. 2,00,000
Deficiency in Rohit’s Profit Share = 2,00,000 − (-2,00,000) = Rs 4,00,000
This deficiency of Rs 54,000 is to be borne by Ankur and Bobby in the ratio of 4 : 1

 Ankur Share of Profit 4,00,000 X 4 5

Ankur Share of Profit = 3,20,000

 Bobby Share of Profit 4,00,000 X 1 5

Bobby Share of Profit  = 80,000

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 88 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 88 Chapter 2 of +2-A

88. Ankur, Bhavns and Disha are partners in a firm. On 1st April, 2017, the balance in their Capital  Accounts stood at 14,00,000, 6,00,000 and 4,00,000 respectively. They shared profits in the proportion of 7 : 3 : 2 respectively. Partners are entitled to interest on capital @ 6% per annum and salary to Bhavna @ 50,000 p.a. and a commission of 3,000 per month to Disha as per the provisions of the partnership Deed. Bhavna’s share of profit excluding interest on capital is guaranteed at not less than 1,70,000 p.a. Disha’s share of profit Including interest on capital but excluding commission is guaranteed at not less than 1,50,000 p.a. Any deficiency arising on that account shall be met by Ankur. The profit of the firm for the year ended 31st March, 2018 amounted to 9,50,000.
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2018.

The solution of Question 88 Chapter 2 of +2-A

:

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount To Interest on Capital*1 By Profit and Loss A/c 9,50,000 Ankur’s Capital A/c 84,000 Bhavan’s Capital A/c 36,000 Disha’s Capital A/c 24,000 1,80,000 To Salary to Bhavns 50,000 To Commission to Disha 3,000 ×4 36,000 To Profit Transferred to *2 Ankur’s Capital A/c 4,14,000 Bhavan’s Capital A/c 1,80,000 Disha’s Capital A/c 1,26,000 7,20,000 9,50,000 9,50,000

Working Note: –

*1 Calculation of Actual Amount of Interest on Ankur’s, Bhavns’s, & Disha’s Capital
Interest on Capital = Opening Capital X Rate of Interest

 Interest on Ankur’s Capital 14,00,000 X 6 100

Interest on Ankur’s Capital  = 84,000/-

 Interest on Bhavns’s Capital 6,00,000 X 6 100

Interest on Bhavns’s Capital = 36,000/-

 Interest on Disha’s Capital 4,00,000 X 6 100

Interest on Disha’s Capital = 24,000/-

*2 Calculation of all Partners’ shares of Profits
Profit of the year = 7,20,000
Profit-sharing Ratio = 7 : 3 : 2

 Ankur’s Share of Profit 7,20,000 X 7 12

Ankur’s Share of Profit = 4,20,000

 Bhavan’s Share of Profit 7,20,000 X 3 12

Bhavan’s Share of Profit = 1,80,000

 Disha’s Share of Profit 7,20,000 X 2 12

Disha’s Share of Profit = 1,20,000
Bhavan’s Minimum Guaranteed Profit = Rs 1,70,000 (excluding interest on capital)
Bhavan’s Actual Profit Share i.e. 1,80,000 is more than his Minimum Guaranteed Profit i.e. 1,70,000
So, there is no Deficiency in Bhavns’s Profit Share in this case
Disha’s Minimum Guaranteed Profit = Rs 1,50,000 (including interest on capital but excluding Commission)
Disha’s Minimum Guaranteed Profit (excluding interest on Capital) = 1,50,000 − 24,000 = Rs 1,26,000

Note: – Interest on Capital already credited from distributed profit, So that’s why it is a deduction from guaranteed profit.

Disha’s Actual Profit Share i.e. 1,20,000 is more than his Minimum Guaranteed Profit i.e. 1,26,000
Deficiency in Disha’s Profit Share = 1,26,000 − 1,20,000 = Rs 6,000

This deficiency of Rs 6,000 is to be borne by Ankur
Ankur’s New Profit Share = 4,20,000 – 6,000 = Rs 4,14,000

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 87 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 87 Chapter 2 of +2-A

87. P, Q and R entered into partnership on 1st April, 2015 to share profits and losses in the ratio of 12 : 8 : 5. It was provided that in no case R’s share in profit be less then 30,000 p.a. The profits and losses for the period ended 31st March were: 2015-16 Profit 1,20,000 2016-17 Profit 1,80,000; 2017-18 Loss 1,20,000.
Pass the necessary Journal entries in the books of the firm.

The solution of Question 87 Chapter 2 of +2-A

:

 Date Particulars L.F. Debit Credit P’s Capital A/c*1 Dr 3,600 Q’s Capital A/c *1 Dr 2,400 To R’s Capital A/c 6,000 (Being adjustment made for deficiency of R’s Capital) P’s Capital A/c *3 Dr 32,400 Q’s Capital A/c *3 Dr 21,600 To R’s Capital A/c 54,000 (Being adjustment made for deficiency of R’s Capital)

Working Note: –

*1 Calculation of R’s share of Profits
Profit of 2015-16 = 1,20,000

 R’s Share of Profit =1,20,000 X 5 25

R’s Share of Profit = 24,000

R’s Minimum Guaranteed Profit = Rs 30,000
R’s Actual Profit Share i.e. 24,000 is less than his Minimum Guaranteed Profit i.e. 30,000
Deficiency in R’s Profit Share= 30,000 − 24,000= Rs 6,000

This deficiency of Rs 10,000 is to be borne by P & Q in the ratio of 12:8.

 P’s Share of Profit =6,000 X 12 20

P’s Share of Profit = 3,600

 Q’s Share of Profit =6,000 X 8 20

Q’s Share of Profit = 2,400

*2 Calculation of R’s share of Profits
Profit of 2016-17 = 1,80,000

 R’s Share of Profit 1,80,000 X 5 25

R’s Share of Profit = 36,000
R’s Minimum Guaranteed Profit = Rs 30,000
So, In this year no Deficiency in R’s Profit Share

*3 Calculation of R’s share of Profits

Loss of 2015-16 = 1,20,000

 R’s Share of Profit =1,20,000 X 5 25

R’s Share of Profit =  24,000
R’s Minimum Guaranteed Profit = Rs 30,000
R’s Actual loss Share i.e. 24,000 is less than his Minimum Guaranteed Profit i.e. 30,000
Deficiency in R’s Profit Share = 30,000 − (-24,000) = Rs 54,000
This deficiency of Rs 54,000 is to be borne by P & Q in the ratio of 12:8.

 P’s Share of Profit =54,000 X 12 20

P’s Share of Profit = 32,400

 Q’s Share of Profit =54,000 X 8 20

Q’s Share of Profit= 21,600

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 86 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 86 Chapter 2 of +2-A

86. Asgar, Chaman and Dholu are partners in a firm. Their Capital Accounts stood at 6,00,000; 5,00,000 and 4,00,000 respectively on 1st April, 2017. They shared Profits and Losses in the proportion of 4: 2 : 3. Partners are entitled to interest on capital @ 8% per annum and salary to Chaman and Dholu @ 7,000 per month and 10,000 per quarter respectively as per the provision of the Partnership Deed. Shola’s share of profit excluding interest on capital but including salary is guaranteed at a minimum of 1,10,000 p.a. Any deficiency arising on that account shall be met by Asgar. The profit for the year ended 31st March 2018 amounted to 4,24,000.
Prepare Profit and Loss Appropriation Account for the year ended 31st March 2018.

The solution of Question 86 Chapter 2 of +2-A

:

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount To Interest on Capital*1 By Profit and Loss A/c 4,24,000 Asgar’s Capital A/c 48,000 Chaman’s Capital A/c 40,000 Dholu’s Capital A/c 32,000 1,20,000 To Salary to Chaman 7,000 ×12 84,000 To Salary to Dholu 10,000 ×4 40,000 To Profit Transferred to *2 Asgar’s Capital A/c 70,000 Chaman’s Capital A/c 40,000 Dholu’s Capital A/c 70,000 1,80,000 4,24,000 4,24,000

Working Note: –

*1 Calculation of Actual Amount of Interest on Asgar’s, Chaman’s, & Dholu’s Capital
Interest on Capital = Opening Capital X Rate of Interest

 Interest on Asgar’s Capital = 6,00,000 X 8 100

Interest on Asgar’s Capital  = 48,000/-

 Interest on Chaman’s Capital = 5,00,000 X 8 100

Interest on Chaman’s Capital = 40,000/-

 Interest on Dholu’s Capital = 4,00,000 X 8 100

Interest on Dholu’s Capital =32,000/-

*2 Calculation of distribution of Profits for the among the partners
Profit available for distribution= 1,80,000

 Interest on Asgar’s Capital = 1,80,000 X 4 9

Asgar’s Share of Profit= 80,000

 Chaman’s Share of Profit= 1,80,000 X 2 9

Chaman’s Share of Profit = 40,000

 Dholu’s Share of Profit= 1,80,000 X 3 9

Dholu’s Share of Profit= 60,000

Dholu’s Minimum Guaranteed Profit = Rs 1,10,000 (excluding interest on capital but including salary)
Dholu’s Minimum Guaranteed Profit (excluding salary)= 1,10,000 – 40,000= Rs 70,000
Dholu’s Actual Profit Share i.e. 60,000 is less than his Minimum Guaranteed Profit i.e. 70,000
Deficiency in Dholu’s Profit Share= 70,000 − 60,000= Rs 10,000

This deficiency of Rs 10,000 is to be borne by Asgar’s

Now, Final distributed among the partners

 Asgar’s Share of Profit = 80,000 – 10,000 =70,000 Chaman’s Share of Profit = 40,000 – 0 =40,000 Dholu’s Share of Profit = 60,000 + 10,000 =70,000

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 85 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 85 Chapter 2 of +2-A

85. A and B are in partnership sharing profits and losses in the ratio of 3: 2. They admit C, their Manager, as a partner with effect from 1st April 2018, for 1/4th share of profits. C, while a Manager, was in receipt of a salary of 27,000 p.a. and a commission of 10% of the net profits after charging such salary and commission. In terms of the Partnership Deed, any excess amount, which C will be entitled to receive as a partner over the amount which would have been due to him if he continued to be the manager, would have to be personally borne by A out of his share of profit. Profit for the year ended 31st March 2019 amounted to 2,25,000. You are required to show Profit and Loss Appropriation Account for the year ended 31at March 2019.

The solution of Question 85 Chapter 2 of +2-A

:

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount By Profit and Loss A/c 2,25,000 To Profit Transferred to *2 A’s Capital A/c 96,750 B’s Capital A/c 72,000 C’s Capital A/c 56,250 2,25,000 2,25,000 2,25,000

Working Note: –

*1 Calculation of Remuneration to C as a Manager
Salary to C =27,000
Commission to C = 10% of Net Profit after Salary and Commission
Net Profit after Salary and Commission =2,25,000 − 27,000 = Rs 1,98,000

 Commission to C 1,98,000 X 10 100 + 10
 Commission to C 1,98,000 X 10 110

Commission to C =18,000

 C’s remuneration as Manager = Salary + Commission = 27,000 + 18,000 = 45,000

Calculation of distribution of Profits for the among the partners

 Profit for 2019 = 2,25,000 C’s Profit share = 1/4th of a firm’s profit
 C’s Share of Profit= 2,25,000 X 1 4

C’s Share of Profit= 56,250
Remaining Profit for remaining partner2,25,000 − 45,000 = Rs 1,80,000

 A’s Share of Profit= 1,80,000 X 3 5

A’s Share of Profit= 1,08,000

 B’s Share of Profit 1,80,000 X 2 5

B’s Share of Profit= 72,000

Part of C’s Profit Share to be borne by A= 56,250 − 45,000 = Rs 11,250

any excess amount, which C will be entitled to receive as a partner over the amount which would have been due to him if he continued to be the manager, would have to be personally borne by A out of his share of profit.

A’s Share of Profit= 1,08,000 – 11,250 = 96,750

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 84 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 84 Chapter 2 of +2-A

84. A, B and C are partners in a firm sharing profits in the ratio of 3 : 2 : 1. They earned a profit of
30,000 during the year ended 31st March, 2019. Distribute profit among A, B and C if:
a C’s share of profit is guaranteed to be 6,000 Minimum.
b Minimum profit payable to C amounting to 6,000 is guaranteed by A.
c Guaranteed minimum profit of 6,000 payable to C is guaranteed by B.
d Any deficiency after making payment of guaranteed 6,000 will be borne by A and B in the ratio of 3 : 1.

The solution of Question 84 Chapter 2 of +2-A

:

Case A

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount By Profit and Loss A/c 30,000 To Profit Transferred to *2 A’s Capital A/c 14,400 B’s Capital A/c 9,600 C’s Capital A/c 6,000 30,000 30,000 30,000

Working Note: –

*1Calculation of distribution of Profits for the among the partners
Profit for year = 30,000
Profit-sharing ratio = 3: 2: 1
C is given a guarantee of a minimum profit of Rs 6,000
Anshu admitted for share = 1/6th share in profits

 A’s Share of Profit 30,000 X 3 6

A’s Share of Profit = 15,000

 B’s Share of Profit 30,000 X 2 6

B’s Share of Profit  = 10,000

 C’s Share of Profit 30,000 X 2 6

C’s Share of Profit = 5,000

C’s Actual Profit Share i. e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share= 6,000 − 5,000= Rs 1,000
This deficiency is to be borne by A and B in their profit sharing ratio i.e. 3: 2
This deficiency is to be borne by A and B in their profit sharing ratio i.e. 3: 2

 A’s Share of Profit = 1,000 X 3 5

A’s Share of Profit= 600

 B’s Share of Profit = 1,000 X 2 5

B’s Share of Profit= 400

Now, Final distributed among the partners

 A’s Share of Profit = 15,000 – 600 =14,400 B’s Share of Profit = 10,000 – 400 =9,600 C’s Share of Profit = 5,000 + 1,000 =6,000

Case B

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount By Profit and Loss A/c 30,000 To Profit Transferred to *2 A’s Capital A/c 14,000 B’s Capital A/c 10,000 C’s Capital A/c 6,000 30,000 30,000 30,000

C’s Actual Profit Share i.e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share = 6,000 − 5,000 = Rs 1,000
This deficiency is to be borne by A

Now, Final distributed among the partners

 A’s Share of Profit = 15,000 – 1,000 =14,000 B’s Share of Profit = 10,000 – 0 =10,000 C’s Share of Profit = 5,000 + 1,000 =6,000

Case C

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount By Profit and Loss A/c 30,000 To Profit Transferred to *2 A’s Capital A/c 15,000 B’s Capital A/c 9,000 C’s Capital A/c 6,000 30,000 30,000 30,000

C’s Actual Profit Share i.e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share = 6,000 − 5,000 = Rs 1,000

This deficiency is to be borne by B

Now, Final distributed among the partners

 A’s Share of Profit = 15,000 – 0 =15,000 B’s Share of Profit = 10,000 – 1,000 =9,000 C’s Share of Profit = 5,000 + 1,000 =6,000

Case  d

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount By Profit and Loss A/c 30,000 To Profit Transferred to *2 A’s Capital A/c 14,250 B’s Capital A/c 9,750 C’s Capital A/c 6,000 30,000 30,000 30,000

C’s Actual Profit Share i.e. Rs 5,000 is less than his Minimum Guaranteed Profit i. e. Rs 6,000
Deficiency in C’s Profit Share= 6,000 − 5,000= Rs 1,000
This deficiency is to be borne by A and B in ratio i.e. 3: 1

 A’s Share of Profit = 1,000 X 3 4

A’s Share of Profit= 750

 B’s Share of Profit = 1,000 X 2 4

B’s Share of Profit= 250

 A’s Share of Profit = 15,000 – 750 =14,250 B’s Share of Profit = 10,000 – 250 =9,750 C’s Share of Profit = 5,000 + 1,000 =6,000

Also, Check out the solved question of previous Chapters: –

### 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. 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

## Question 83 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 83 Chapter 2 of +2-A

83. Pranshu and Himanshu are partners sharing profits and losses in the ratio of 3: 2 respectively. They admit Anshu as a partner with 1/6 share in the profits of the firm. Pranshu personally guaranteed that Anshu’s share of profit would not be less than 30,000 in any year. The net profit of the firm for the ear ending 31st March 2013 was 90,000.
Prepare Profit and Loss Appropriation Account.

The solution of Question 83 Chapter 2 of +2-A

:

 Balance Sheet (for the year ended 31st March 2019) Liabilities Amount Assets Amount By Profit and Loss A/c 90,000 To Profit Transferred to *2 Pranshu’s Capital A/c 30,000 Himanshu’sCapital A/c 30,000 Anshu’s Capital A/c 30,000 90,000 90,000 90,000

Working Note: –

*1 Calculation of New Profit Sharing Ratio
Old Profit Sharing Ratio = 3 : 2
Let assume the total share of the firm is equal to Re 1
Anshu admitted for share = 1/6th share in profits

 Remaining share for Old Partners’ = 1 – 1 6
 6 – 1 6
 5 6
 Pranshu’s New Profit share = 5 X 3 6 5

 Pranshu’s New Profit share = 15 30

Himanshu’s New Profit share

 Himanshu’s New Profit share = 5 X 2 6 5
 Pranshu’s New Profit share = 10 30
 Himanshu’s New Profit share = 1 X 5 6 5

 Pranshu’s New Profit share = 5 30

Old Profit Sharing Ratio =15: 10: 5
New Profit Sharing Ratio= 3: 2: 1

Calculation of New Profit share among the partners’

 Pranshu’s Share of Profit = 90,000 X 3 6

Pranshu’s Share of Profit = 45,000

 Himanshu’s Share of Profit = 90,000 X 2 6

Himanshu’s Share of Profit =30,000

 Anshu’s Share of Profit = 90,000 X 1 6

Anshu’s Share of Profit= 15,000

Anshu’s Minimum Guaranteed Profit = Rs 30,000
Anshu’s Actual Profit Share i.e. 15,000 is less than his Minimum Guaranteed Profit i.e. 30,000
Deficiency in Anshu’s Profit Share == 30,000 − 15,000 = Rs 15,000
This deficiency of Rs 15,000 is to be borne by Pranshu’s

Now, Final distributed among the partners

 Pranshu’s Share of Profit = 45,000 – 15,000 =30,000 Himanshu’s Share of Profit = 30,000 – 0 =30,000 Anshu’s Share of Profit = 15,000 + 15,000 =30,000

Also, Check out the solved question of previous Chapters: –

### 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. 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