(4) PARTNERSHIP —- FUNDAMENTALS
Questions regarding
Profit and Loss Appropriation Account:-
1. X and Y are partners
in a Firm, the Profit for the year ending 31st March, 2019 was Rs. 10, 00,000.
Show the distribution of profit after taking the following into consideration:
i) Interest on Capital
Rs. 20,000 and Rs. 30,000 respectively.
(ii) Interest on Drawings
was Rs. 5,000 and Rs. 8,000
(iii) Y is to allowed
Commission of Rs. 12,000
(iv) Rs. 24,000 of the
divisible profits is to be kept in a reserve account.
2. Ram and Sham are partners
with the Capital of Rs. 10, 00,000 and Rs. 6, 00,000 respectively. Profit for
the year ending 31st March, 2019 was Rs. 6, 92,000. Show the distribution of
profit after taking the following into consideration:
(i) Interest on Capital
to be allowed @ 5% p.a.
(ii) Interest on
Drawings @ 6% p.a. Drawings were Rs. 1, 20,000 and
Rs. 80,000
respectively.
(iii) Sham is to be
allowed a commission of 2% on sales, sale for the year were Rs. 60, 00,000
(iv) 10% of the
divisible profit is to be kept in a reserve account. (Do yourself)
3. Ekam and Gursewak
are partners, sharing profit and loss in the ratio 2:1 with capital of Rs. 10,
00,000 and Rs. 5, 00,000 respectively. Each partner is entitled to 8% p.a.
interest on his capital. Ekam is entitled to a salary of Rs. 3,500 per month.
Gursewak is entitled to a commission of 10% of net profit. Net profit for the
year is Rs.2, 00,000. Prepare profit and loss appropriation account. (Do yourself)
4. Hardeep, Avtar and
Karan are partner in a firm in the ratio 2:3:2. There capital as on 1st April, 2018 were 5,00,000, 4,00,000 and
3,00,000 respectively. On 1st July, 2018 they introduced further
capitals of Rs. 1, 00,000, Rs. 80,000 and Rs. 50,000 respectively. Interest is
to be allowed @ 10% p.a. on the capitals. Calculate interest on capitals for
the year ending 31, March, 2019. (Do yourself)
Solution
of Question No. 1
PROFIT AND LOSS
APPROPRIATION ACCOUNT
Dr. for the year ending 31st March, 2019. Cr.
|
Particulars |
Amount |
Particulars |
Amount |
|
To Interest on Capital: X Y To Commission to Y To Reserve Account To
Profit transferred to: X's Capital Account Y's Capital Account |
20,000 30,000 12,000 24,000 4,63,500 4,63,500 |
By Net Profit By
Interest on Drawings X Y |
10,
00,000 5,000 8, 000 |
|
10,
13,000 |
10,
13,000 |
Golden Rules:
1. If a partner has
given loan to the firm and if the rate of interest is not given in the question
interest will be charged at the rate of 6% p.a.
2. If Profit Sharing
Ratio is not given, it will always be distributed equally ratio.
3. If rate of Interest
on Capital and Interest on Drawing is not given in the question, there will be
no interest to be given any partner.
