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

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(1) Calculation of further capital to be introduced or withdrawn by partners as on July 1, 2020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

What is Partnership – Meaning and its Types

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

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

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

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

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