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
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What is Partnership – Meaning and Its 4 Types
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
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