Fundamentals of parnership_ Chapter 2.pptx

Patter ship firm

1. Class   XII          Subject Accountancy

2. Starter activity case study instructions 3 mins will be allocated for reading the case. Identify the form of business. Students are not permitted to discuss the answers. .

3. Case let A textile factory will start in nearby area where Gopal is carrying on his business. As a businessman, he is now in a jubilant mood. He is thinking that once the textile factory is set up, he will get more customers; the sales will increase, and he will earn more profit. But, for all these, he will have to expand his business, and for this he needs more money. The major problem is how to arrange the additional funds. He has the option of getting loans from the banks. But the fear of loss comes to his mind again and again. He does not want to take that risk. Another option is that he may join hands with some other person. By doing so, more resources can be raised, work can be shared, and business can be run in a better way. The risk of loss will also be shared.

4. Teacher talk time 10 mins

5. Learning objectives Meaning of partnership  Define partnership  Essential features of partnership  Rights of partners

6. Fundamentals of partnership firm Indian Partnership Act of 1932, Section 4 "A partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all"

7. Nature of partnership Legal Point of view: It's not a separate legal entity from its partners Accounting point of view: it's a separate legal entity from its partners.

8. Essential features of partnership Two or more persons: There must be at least two persons to from a partnership and all such persons must be competent to contract. Maximum Number of partners: The companies Act,2013 empowers the Central Government to prescribe number of partners in a firm subject to maximum of 100 partners. According to the miscellaneous rules 2014, The central government has prescribed maximum number of partners in a firm to be 50. 

9. Minor as a partner Lalit, Saksham, and Mayank are partners in a firm. Lalit and Sakshi are very upset due to the untimely demise of Mayank and wish to help his family. On the suggestion of their common friend Aditya, Lalit and Saksham decide to include Mayank's 13-year-old son Vaibhav in their business. • ( i ) Comment on the status of  Vaibhav as a partner. • (ii) Will the status of Vaibhav change when he attains majority?

10. Minor as a partner A minor can be a partner in the profits of the firm and not in the losses. A minor partner on becoming a major should accept or refuse the Partnership in the firm within 6 months. If he/she does not so decide, he/she becomes liable for all the actions since he/she became partner.

11. Partnership comes into existence by an agreement, either written or oral. It is the basis of relationship among the partners, which may be for a particular venture, for a period or at will.  The written agreement among the partners is known as partnership deed

12. Lawful Business A partnership is established for a lawful business.

13. Profit sharing The agreement between the partners must be to share profits and losses of the business. It is not essential that all the partners must share losses.

14. Business can be carried on by all or any of the partners acting for all Business of the partnership can be carried on by all the partners or by any of them acting for all the partners. Partners are agents as well as the principals.

15. Rights of the partner Every partner has the right to Participate in the management of the business.  Be consulted about the affairs of the business.   Inspect the books of account and have a copy of it. Share profits or losses with others in the agreed ratio. If a partner has advanced loan, he has the right to receive interest thereon at an agreed rate of interest. In case the rate of interest is not agreed, interest is paid at the rate provided in the Indian Partnership Act, 1932, i.e., @ 6% p.a. Take decisions in the interest of the business. Allow the admission of a new partner.  After giving proper notice, a partner has the right to retire from the firm. 

16. Plenary MCQ's Test

17. Instructions • 5 mins will be allocated for answering these questions. • Students are not permitted to discuss the answers. • Students are expected to record their answers in their notebook.

18. MCQ's The Maximum number of partners allowed in a partnership firm is: • 50 • 200 • 100 • 400 A, B,C and D are partners in a firm. They want to expand their business for which additional capital and  more managerial experts are required. for this they want to admit more members in their firm.  What is the maximum member of additional members that can be admitted by them in the firm: • 02 • 20 • 50 • 46

19. A partnership firm has four partners. How many additional partners can be admitted into the business as per the provisions of the Companies Act, 2013? • 50 • 46 • 100 • 96 In the absence of partnership deed, interest in loan of a partner is allowed • at 8% per annum • at 6% per annum • no interest is allowed • at 12% per annum

20. A partnership business is determined by the mutual agreement of a partner. This kind of agreement can be? • Oral agreement • Written agreement • Oral or written agreement • None of them Is a partnership business regarded as a separate legal entity? • Yes • No

21. Starter activity Instructions 3 mins will be allocated for identifying the contents. Each team should have 4 members. Write any  contents in the partnership deed. Students are not permitted to discuss the answers. Students are expected to record their answers in their notebook. 2 mins will be given to write the answers. Session 2

22. Teacher talk time 10 mins

23. Partnership comes into existence by an agreement, either written or oral. It is always better to have written agreement to avoid any disputes. The written document known as partnership deed.

24. matters Sharing of profits/ losses. Interest on capital Interest on drawings Interest on advance/ loan by a partner. Remuneration to partners. Admission of partner. Provisions of the Indian partnership Act, 1932 Profits/losses are shared equally Interest on capital is not allowed to partners Interest on drawings is not charged from partners. Interest on loan by partner is paid @6% p.a. it means interest is paid whether the firm earns profit or incur loss. Remuneration is not allowed to partner. New partner cannot be admitted unless all the partners agree to it. Provisions affecting accounting treatment in the absence of partnership deed

25. Liabilities of partners

26. individual activity Instructions  5 mins will be allocated to find the solution Students are not permitted to discuss the answers. Students are expected to record their answers in their notebook.

27. Activity Mohan and Radha want to start a shop to sell Rajasthani sweets. They did not know how to develop the agreement for this purpose. So, they approached a chartered Accountant who advised them to prepare a document which may stipulate the terms and conditions of the agreement. Name the document about which the chartered accountant advised Mohan and Radha. State any four important contents they should include in the agreement.

28. plenary Following differences have arisen among P,Q and R. State who is correct in each case. P used  ₹50,000 belonging to the firm and earned of  ₹5,000. Q and R want the amount to be given to the firm. Q used  ₹10,000 belonging to the firm and incurred a loss of ₹1,000. He wants the firm to bear the loss. P and Q want to purchase goods from star Ltd., R does not agree. Q and R want to admit W as partner, P does not agree. R had given loan of  ₹2,00,000 of the firm and demands interest at 10% p.a. P and Q do not want to pay the interest.

29. Starter activity Instructions 5 mins will be allocated for writing. Students are not permitted to discuss the answers. Students are expected to record their answers in their notebook. Session 3

30. Write the format of profit and loss account and list any five expenses and losses.

31. Teacher talk time 10 mins

32. Charge against profit and Appropriation of profit

33. Interest on loan by the partner 

34. The journal entries are Interest on loan by partner A/c       Dr        To loan by partner A/c 2. Profit and loss A/c    Dr    To interest on loan by partners A/c

35. Collaborative Activity Instructions ​ Each team should have 4 members. ​ Students are not permitted to discuss the answers. ​ Students are expected to record their answers in their notebook. ​ 5 mins will be given to solve the question.

36. Sita and Geeta are partners in a firm sharing profits in the ratio of 3:2. They had given loan to the form of 30,000 in their profit-sharing ratio on 1st October 2021. The Partnership Deed is silent on interest on loans from partners. Compute interest payable by the firm to the partners, assuming the firm closes its books every year on 31st March . Pass the journal entries.

37. Plenary MCQ's Pick the odd one out of the following. Rent to Partner. Interest on partner's loan. Manager's Commission. Interest on partner's Capital. In the absence of partnership deed, profit of a firm is divided among the partners in the ratio of capital Equally In the ratio of time devoted for the firm's business. According to the managerial abilities of the partners.

38. starter

39. Mahesh, ramesh and suresh are partners in a firm. They do not have a partnership deed. At the end of the first year of the business, they faced the following problems: Mahesh wants that interest on capital to be allowed to partners, but ramesh and suresh do not agree.  Ramesh wants that the partners should be allowed to draw salary but mahesh and suresh do not agree. Mahesh and ramesh want that suresh should pay interest on loan given to him by the firm but suresh dies not agree. Mahesh and ramesh having contributed larger amounts of capital, desire that the profits should be distributed in the ratio of their capital contribution but suresh  does not agree.