Question 91 Chapter 2 of Class 12 Part - 1 VK Publication

Question 91 Chapter 2 of Class 12 Part – 1

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The solution of Question 91 Chapter 2 of Class 12 Part – 1: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

91. Ramesh and Somesh are in partnership sharing profits and losses in 3:2. They decided to admit their manager, Kamlesh as a partner with effect from 1st April 2016, providing him share of profits. As a manager, Kamlesh was obtaining a salary of Rs. 54,000 and a commission of 10% of net profits after charging such salary and commission. As per partnership dee any excess amount entitled to Kamlesh as a partner over the amount which would have been due to him if he continued to be the manager, would have to be borne by Ramesh and Somesh in their profit sharing ratio. Profit for the year ended 31st March, 2017 amounts to Rs. 4,50,000. Show the distribution of profit among partners for the year ended 31st Marc 2017.

The solution of Question 91 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Appreciation Account

For the year ended 31st March 2017

Particulars	Amount	Particular	Amount
To Profit Transferred to:		By Profit And Loss A/C	4,50,000
Ramesh’s Capital A/C	1,80,000	(Net profit)
Somesh’s Capital A/C	1,20,000
Kamlesh’s Capital A/C	1,50,000
	4,50,000		4,50,000

Working Note:

Profit before Kamlesh’s salary and commission	4,50,000
Less: Kamlesh’s salary	54,000
	3,96,000
Less: Kamlesh’s commission((3,96,000×10)/110)	36,000
Net divisible profit	3,60,000

Kamlesh’s total remuneration as a manager 54,000+ 36,000 = Rs. 90,000
Ramesh’s share in profit = 5,60,000×3/5 = Rs. 2,16,000
Somesh’s share in profit= 3,60,000 ×2/5= Rs. 1,44,000
As Kamlesh has joined as a partner, he will get share in profit of Rs. 4,50,000,i.e., Rs. 1,50,000
Therefore, deficiency (difference) of 260,000 (1,50,000-90,000) will be borne by Ramesh and Somesh in the ratio of 3:2
Deficiency borne by Ramesh 60,000 ×3/5= Rs. 86,000.
Deficiency borne by Somesh = 60,000×2/5 = Rs.24,000
Thus, final share in profit,
for Ramesh: 2,16,000-36,000= Rs. 1,80,000
for Somesh: 1,44,000-24,000 = Rs. 1,20,000
for Kamlesh: Rs.1,50,000

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