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Question 37 Chapter 3 – Unimax Class 12 Part 1 – 2021

Question 37 Chapter 3 - Unimax Class 12 Part 1 - 2021
Question 37 Chapter 3 - Unimax Class 12 Part 1 - 2021

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Question 37 Chapter 3 – Unimax Class 12 Part 1

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37. The partnership agreement of Kanu and Shruti provides that :
(i) Profits will be shared equally.
(ii) Shruti will be allowed an annual salary of Rs. 4800.
(iii) Kanu will be allowed a commission equal to 10% of net profit after allowing Shruti’s salary but before any other adjustments.
(iv) 7% interest will be allowed on partners’ fixed capitals.
(v) 5% interest will charged on partners’ annual drawings without considering time period.
(vi) The fixed Capitals of Kanu and Shruti are Rs. 100000 and Rs. 80000 respectively. Their annual drawings were Rs. 16000 and Rs. 14000 respectively.
The net profit for year ending 31st March, 2021 before providing above adjustments amounted to Rs. 40000. Prepare firm’s Profit and Loss Appropriation Account.

The solution of Question 37 Chapter 3 – Unimax Class 12 Part 1:

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

Particulars Rs.Particulars Rs.
To Interest on capital  By Net Profit 40000
– Kanu7000 By int. on drawing  
– Shruti560012600– Kanu800 
To Shruti’s Salary 4800– Shruti700 
To Kanu’s Commission 3520   
To Profit transferred to Capital A/c     
– Kanu10290    
– Shruti1029020580   
  41500  41500

Working Note :
(1) Kanu’s Commission = (40000 – 4800) @ 10%
= 35200 x 10% = 3520
(2) Interest on Drawings
Kanu : 16000 x5/100= Rs. 800 
Shruti 14000 x5/100= Rs. 700

What is Partnership – Meaning and Its 4 Types

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