FUNDAMENTALS OF PARTNERSHIP 2024 SUNIL PANDA.pdf
yamunaamit12345
272 views
85 slides
Jul 01, 2024
Slide 1 of 85
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
About This Presentation
High quality HD Accountancy dk goel Fundamentals of partnership premium notes by sunil Panda sir for free cbse board exam and cuet covered
Slide Content
Partnership is Defined by Indian Partnership Act,
1932, Section-4 as follows-
Partnership is the relation between person who have
agreed to share the profits of a business carried on
by all or any of them acting for all.
Meaning
Minimum partner 2
Maximum partner 50 as per rule 10 of the companies
rules, 2014
Essential condition of Partnership
Business + Profits + Mutual agency
1932, Section-4 as follows-
Partnership is the relation between person who have
agreed to share the profits of a business carried on
by all or any of them acting for all.
Meaning
Minimum partner 2
Maximum partner 50 as per rule 10 of the companies
rules, 2014
Essential condition of Partnership
Business + Profits + Mutual agency
❑Partners:- The persons who have entered into a partnership with one another are individually are called
partners.
❑Firm:- The collectively all a partner called firm.
❑Firm Name:- The name under which the business is carried is called firm name.
❑Partnership from the legal viewpoint, is not a separate legal entity from its partners since firms debts a
payable from personal assets of the partners, if the firm is unable to repay its liabilities.
partners.
❑Firm:- The collectively all a partner called firm.
❑Firm Name:- The name under which the business is carried is called firm name.
❑Partnership from the legal viewpoint, is not a separate legal entity from its partners since firms debts a
payable from personal assets of the partners, if the firm is unable to repay its liabilities.
a)Two or more persons
b)Agreement (Oral or written)
c)Lawful business (Existence of business & profit motive)
d)Sharing of profits
e)Principle and Agent relationship
f)No separate existence (legal point of View)
g)Business can be carried on by all or any one of them acting for all.
Essential Features of Partnership
Minor Partner:- A minor though not competent to contract, can be a partner in the firm but only in profits
of the firm and not in losses. A minor partner should accept or refuse the partnership in the firm within 6
months on becoming major, i.e. attaining 18 year of age. If he/she does not so decide, he/she becomes
liable for all the actions since he/she became partner
b)Agreement (Oral or written)
c)Lawful business (Existence of business & profit motive)
d)Sharing of profits
e)Principle and Agent relationship
f)No separate existence (legal point of View)
g)Business can be carried on by all or any one of them acting for all.
Essential Features of Partnership
Minor Partner:- A minor though not competent to contract, can be a partner in the firm but only in profits
of the firm and not in losses. A minor partner should accept or refuse the partnership in the firm within 6
months on becoming major, i.e. attaining 18 year of age. If he/she does not so decide, he/she becomes
liable for all the actions since he/she became partner
Rights of a partner
a)Right to participate in management
b)Right to inspect books of account and have a copy of it
c)Right to share profits or losses
d)Right to received interest on his/her loan to the firm @6% p.a. (Charge)
e)A partner has the right not to allow the admission of a new partner
f)After giving proper notice, a partner has right to retire from the firm
PARTNER
a)Right to participate in management
b)Right to inspect books of account and have a copy of it
c)Right to share profits or losses
d)Right to received interest on his/her loan to the firm @6% p.a. (Charge)
e)A partner has the right not to allow the admission of a new partner
f)After giving proper notice, a partner has right to retire from the firm
PARTNER
Partnership Deed
A partnership deed is an agreement between the partners of a firm that contains the terms and conditions
of partnership.
It is not mandatory.
It also called “Articles of partnership”
It is Prepared as per Stamp Act Provisions
It contains the following points
i)Name and Address of the firm & partners.
ii)Nature of business, capital contribution, profit sharing ratio,
Accounting period, Duration of partnership & settlement of Disputes.
i)Interest on capital, salaries to partners, commission, etc.
ii)Rights and Duties of Partners.
A partnership deed is an agreement between the partners of a firm that contains the terms and conditions
of partnership.
It is not mandatory.
It also called “Articles of partnership”
It is Prepared as per Stamp Act Provisions
It contains the following points
i)Name and Address of the firm & partners.
ii)Nature of business, capital contribution, profit sharing ratio,
Accounting period, Duration of partnership & settlement of Disputes.
i)Interest on capital, salaries to partners, commission, etc.
ii)Rights and Duties of Partners.
In partnership the liability of all partners are unlimited
Registration of Partnership firm is not Compulsory.
Partnership is separate business entity from Accounting point of view.
(LLP ACT 2008)
LLP : Limited Liability Partnership
Here liability of partners are limited
(Mix of Partnership and Company)
IMPORTANT POINTS TO BE REMEMBERED
Registration of Partnership firm is not Compulsory.
Partnership is separate business entity from Accounting point of view.
(LLP ACT 2008)
LLP : Limited Liability Partnership
Here liability of partners are limited
(Mix of Partnership and Company)
IMPORTANT POINTS TO BE REMEMBERED
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
A Partnership firms prepare Trading account, Profit & Loss account, and Balance Sheet. In addition a
partnership firm prepares profit & loss appropriation account to which net profit or net loss as per the P&L
account is transferred to appropriate. It as per the Partnership Deed.
This account is an EXTENSION OF PROFIT & LOSS ACCOUNT.
PROFIT & LOSS APPROPRIATION ACCOUNT
partnership firm prepares profit & loss appropriation account to which net profit or net loss as per the P&L
account is transferred to appropriate. It as per the Partnership Deed.
This account is an EXTENSION OF PROFIT & LOSS ACCOUNT.
PROFIT & LOSS APPROPRIATION ACCOUNT
Format of Profit & Loss Appropriation A/c
Particulars Amount Particulars Amount
To Profit & Loss A/c (Net Loss Transfered
From P&L A/c)
To Interest on Capitals
A xx
B xx
To Partner’s Salaries
A xx
B xx
To Partner’s Commissions
A xx
B xx
To Reserve
To Divisible Profit transfer to Partner’s
Capital/Current A/c of
A xx
B xx
XX
XX
XX
XX
XX
XX
By Profit & Loss A/c (Net Profit Transferred
from P&L A/c)
By Interest on Drawings
A xx
B xx
To Divisible Loss transfer to Partner’s
Capital/Current A/c of
A xx
B xx
XX
XX
XX
XX XX
Dr. Cr.
Particulars Amount Particulars Amount
To Profit & Loss A/c (Net Loss Transfered
From P&L A/c)
To Interest on Capitals
A xx
B xx
To Partner’s Salaries
A xx
B xx
To Partner’s Commissions
A xx
B xx
To Reserve
To Divisible Profit transfer to Partner’s
Capital/Current A/c of
A xx
B xx
XX
XX
XX
XX
XX
XX
By Profit & Loss A/c (Net Profit Transferred
from P&L A/c)
By Interest on Drawings
A xx
B xx
To Divisible Loss transfer to Partner’s
Capital/Current A/c of
A xx
B xx
XX
XX
XX
XX XX
Dr. Cr.
Partnership deed Vs. Partnership Act 1932
In the absence of partnership deed (Partnership Act provisions are applicable)
a)Profit sharing ratio will equal
b)No interest on capital, no salary, no interest on drawings, etc.
c)Interest on (partners loan to firm) @6% p.a.
d)Interest on (firm loans to Partners) – NO INTEREST
It is a charge against profit hence provided even in case of losses
e) Interest on capital & salary if given in partnership deed then it will provided but only out of profits.
a)Profit sharing ratio will equal
b)No interest on capital, no salary, no interest on drawings, etc.
c)Interest on (partners loan to firm) @6% p.a.
d)Interest on (firm loans to Partners) – NO INTEREST
It is a charge against profit hence provided even in case of losses
e) Interest on capital & salary if given in partnership deed then it will provided but only out of profits.
Charge against profits & Appropriation of profits
Charge against profits means that it is an expense for the firm and it is paid whether the firm earn profit or
incurs loss.
✓Manager Commission
✓Partners Loan
✓Rent to a Partner
Charge against profits means that it is an expense for the firm and it is paid whether the firm earn profit or
incurs loss.
✓Manager Commission
✓Partners Loan
✓Rent to a Partner
Q.1) Ram, Shyam and Payal were in partnership sharing profits and losses in the ratio of 2:2:1.
Their capital as follows:
Ram- 2,50,000
Shyam- 1,50,000
Payal- 1,00,000
Net profit of the firm is ₹25,000 and Interest on Capital @10% p.a.
Calculate interest on capital of each partner's.
Their capital as follows:
Ram- 2,50,000
Shyam- 1,50,000
Payal- 1,00,000
Net profit of the firm is ₹25,000 and Interest on Capital @10% p.a.
Calculate interest on capital of each partner's.
Q.2) Ram, Shyam and Payal were in partnership sharing profits and losses in the ratio of 2:2:1. Their capital
as follows:
Ram- 2,50,000
Shyam- 1,50,000
Payal- 1,00,000
Net profit of the firm is ₹25,000 and Interest on Capital @10% p.a. is a charge.
Calculate interest on capital of each partner's.
as follows:
Ram- 2,50,000
Shyam- 1,50,000
Payal- 1,00,000
Net profit of the firm is ₹25,000 and Interest on Capital @10% p.a. is a charge.
Calculate interest on capital of each partner's.
Decisions
Minor
(Majority)
Major
(100% Consent)
Minor
(Majority)
Major
(100% Consent)
Q.3) C, S and K 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 issues:
a)C wants that interest on capital should be allowed to the partners but S and K do not agree.
b)S wants that the partners should be allowed to draw salary but C and K do not agree.
c)C and S want that K should pay interest on loan given to him by the firm but K does not agree.
d)C and S having contributed more capital, desire that the profits should be distributed in the ratio of
their capital contribution but K does not agree.
the business, they faced the following issues:
a)C wants that interest on capital should be allowed to the partners but S and K do not agree.
b)S wants that the partners should be allowed to draw salary but C and K do not agree.
c)C and S want that K should pay interest on loan given to him by the firm but K does not agree.
d)C and S having contributed more capital, desire that the profits should be distributed in the ratio of
their capital contribution but K does not agree.
Q.4) Amar, Lalit and Charu are partners in a firm and they do not have a Partnership Deed.
i) Amar had invested more capital than other partners and asks for interest on capital at 10% p.a. But
Lalit and Charu do not agree with him.
ii) Lalit devotes more time in handling the business and demands a salary of 5,000 p.m. But Amar and
Charu do not agree with him.
iii) Charu demands interest on the loan of 50,000 given by her @12% p.a.
iv) Amar withdrew 10,000 from the firm for his personal use. Lalit and Charu demand that interest on
drawings be charged from him @10% p.a.
v) Profit for the year before the above claims was 50,000. Amar demands profits to be distributed in the
capital ratio.
vi) Lalit wants to introduce his son Inder as partners. Charu objects to his Proposal.
How will be the above issue resolved?
i) Amar had invested more capital than other partners and asks for interest on capital at 10% p.a. But
Lalit and Charu do not agree with him.
ii) Lalit devotes more time in handling the business and demands a salary of 5,000 p.m. But Amar and
Charu do not agree with him.
iii) Charu demands interest on the loan of 50,000 given by her @12% p.a.
iv) Amar withdrew 10,000 from the firm for his personal use. Lalit and Charu demand that interest on
drawings be charged from him @10% p.a.
v) Profit for the year before the above claims was 50,000. Amar demands profits to be distributed in the
capital ratio.
vi) Lalit wants to introduce his son Inder as partners. Charu objects to his Proposal.
How will be the above issue resolved?
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
Drawings
Drawings means the amount withdrawn in cash or kind by partners for their personal uses.
Calculation of Interest on Drawing
Case 1. When Date of Withdrawn is given [Then Calculate Interest accordingly]
E.g. X withdraw 50,000 on 1
st
October, 2024 year ended 31
st
March, 2025. Calculate Interest @6% p.a.
Drawings means the amount withdrawn in cash or kind by partners for their personal uses.
Calculation of Interest on Drawing
Case 1. When Date of Withdrawn is given [Then Calculate Interest accordingly]
E.g. X withdraw 50,000 on 1
st
October, 2024 year ended 31
st
March, 2025. Calculate Interest @6% p.a.
Case 2. When Date of Withdrawn is not given [Then Calculate Interest for 6 months]
E.g. X withdraw 60,000 in the year 2024-25. Interest @ 6% p.a. Calculate Interest on Drawing.
Case 3. When P.a. (Per Annum) is not given in the Question [Then Ignore Time Factor]
E.g. X withdraw 60,000 in the year 2024-25. Interest @ 6% Calculate Interest on Drawing.
E.g. X withdraw 60,000 in the year 2024-25. Interest @ 6% p.a. Calculate Interest on Drawing.
Case 3. When P.a. (Per Annum) is not given in the Question [Then Ignore Time Factor]
E.g. X withdraw 60,000 in the year 2024-25. Interest @ 6% Calculate Interest on Drawing.
Case 4. When a partner withdraw an equal amount, in every month, till 12 months
E.g. X withdraw 5,000 at the end of every month till 12 months. Calculate Interest on Drawing @6% p.a.
Beginning of every month Middle every month End every month
E.g. X withdraw 5,000 at the end of every month till 12 months. Calculate Interest on Drawing @6% p.a.
Beginning of every month Middle every month End every month
Case 5. When a partner withdraw an equal amount in every Quarter
E.g. X withdraw 5,000 at the Beginning of every quarter till 12 months. Calculate Interest on Drawing
@10% p.a.
1 Quarter = 3 Months
1 Year = 4 Quarters
Beginning of every month Middle every month End every month
E.g. X withdraw 5,000 at the Beginning of every quarter till 12 months. Calculate Interest on Drawing
@10% p.a.
1 Quarter = 3 Months
1 Year = 4 Quarters
Beginning of every month Middle every month End every month
Q.5) If he withdrew 6,000 in the beginning of each quarter for the year ended 31
st
March, 2024 and interest
on drawings is 1,500.
calculate the rate of interest on drawings of Mohan.
st
March, 2024 and interest
on drawings is 1,500.
calculate the rate of interest on drawings of Mohan.
Case 6. When a partner withdraw an equal amount in every Half year
E.g. X withdraw 5,000 at the Beginning of every half year. Calculate Interest on Drawing @10% p.a.
Beginning of every month Middle every month End every month
1 Year = 2 Half years
E.g. X withdraw 5,000 at the Beginning of every half year. Calculate Interest on Drawing @10% p.a.
Beginning of every month Middle every month End every month
1 Year = 2 Half years
Case 7. If a partner withdraw an equal amount in every month till 6 month only
E.g. X withdraw 5,000 at the End of every month for 6 months. Calculate Interest on Drawing @10% p.a.
for six months
Beginning Middle End
E.g. X withdraw 5,000 at the End of every month for 6 months. Calculate Interest on Drawing @10% p.a.
for six months
Beginning Middle End
Q.6) A and B are partners sharing profit equally. A drew regularly 4,000 in the beginning of every month for
six month ended 30
th
September,2022. calculate interest on drawings @ 5% p.a. for a period of six month
six month ended 30
th
September,2022. calculate interest on drawings @ 5% p.a. for a period of six month
FORMULA OF TIME FACTOR
Case 8. When partner withdraw unequal amount on different dates.
Q.7) The capital accounts of Alka and Archana showed credit balances of 4,00,000 and 3,00,000
respectively, after taking into account drawings and net profit of 2,00,000. the drawings of the partners
during the year 2022-23 were:
i) Alka withdrew 10,000 at the end of each quarter
ii) Archana’s drawings were:
31
st
May, 2022 8,000
1
st
November, 2022 7,000
1
st
February, 2023 5,000
calculate interest on partner’s drawings @ 6% p.a. for the year ended 31
st
March,2023
respectively, after taking into account drawings and net profit of 2,00,000. the drawings of the partners
during the year 2022-23 were:
i) Alka withdrew 10,000 at the end of each quarter
ii) Archana’s drawings were:
31
st
May, 2022 8,000
1
st
November, 2022 7,000
1
st
February, 2023 5,000
calculate interest on partner’s drawings @ 6% p.a. for the year ended 31
st
March,2023
Q.8) Komal withdrew 10,000 on 15
th
day of every month. Interest on drawings was to be charged @12%
p.a. Calculate interest on Komal’s Drawing
th
day of every month. Interest on drawings was to be charged @12%
p.a. Calculate interest on Komal’s Drawing
Q.9) T and K are partners sharing profits equally. K regularly withdrew 10,000 per month in the beginning of
the month for six months ended 30
th
September, 2024. calculate interest on drawing @10% p.a. for the year
ended 31
st
March, 2024
SPECIAL CASE
the month for six months ended 30
th
September, 2024. calculate interest on drawing @10% p.a. for the year
ended 31
st
March, 2024
SPECIAL CASE
Q.10) Green and Orange are partners. Green draws a fixed amount at the beginning of every
month. Interest on drawings is charged @8% p.a. At the end of the year interest on Green's
drawings amounts to ₹ 2,600.
Monthly Drawings of Green were ?
month. Interest on drawings is charged @8% p.a. At the end of the year interest on Green's
drawings amounts to ₹ 2,600.
Monthly Drawings of Green were ?
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
Salary and Commission to partners
Practical problems
Q.11) X, Y and Z are partners in a firm. X is to get commission of 10% of net profit before charging
commission. Y is to get a commission of 10% on net profit after charging all commission while Z is to get
commission @3% of net sales. Net profit for the year ended 31
st
March, 2024 was 55,000 and net sales was
5,00,000.
Determine commission of X, Y and Z. also show the distribution of profit.
commission. Y is to get a commission of 10% on net profit after charging all commission while Z is to get
commission @3% of net sales. Net profit for the year ended 31
st
March, 2024 was 55,000 and net sales was
5,00,000.
Determine commission of X, Y and Z. also show the distribution of profit.
Q.12) Anil, Bunty and Vineet are partners sharing profit and losses equally. As per partnership deed Vineet is
entitled to commission of 10% on the net profit after charging such commission. Net profit before charging
commission is 2,20,000.
Determine the amount of commission payable to Vineet
entitled to commission of 10% on the net profit after charging such commission. Net profit before charging
commission is 2,20,000.
Determine the amount of commission payable to Vineet
Q.13) X and Y are partners in a firm X is entitled to a salary of 10,000 per month and commission of 10% of the
net profit after partners salary but before charging commission. Y is entitled to a salary of 25,000 p.a. and
commission of 10% of the net profit after charging all commission and partner’s salaries. Net profit before
providing for partners salaries and commission for the year ended 31
st
March, 2023 was 4,20,000. Show
distribution of profit.
net profit after partners salary but before charging commission. Y is entitled to a salary of 25,000 p.a. and
commission of 10% of the net profit after charging all commission and partner’s salaries. Net profit before
providing for partners salaries and commission for the year ended 31
st
March, 2023 was 4,20,000. Show
distribution of profit.
Q.14) Aman and Boman are partners sharing profits equally. Business is being carried from the property
owned by Aman on a yearly rent of 24,000. Aman is to get salary of 1,20,000 p.a. and Boman is to get
commission @5% of net sales, which during the year was 30,00,000. Profit for the year ended 31
st
March,
2024 before providing for rent was 5,00,000.
Prepare Profit & Loss Appropriation Account for the year ended 31
st
March, 2024.
owned by Aman on a yearly rent of 24,000. Aman is to get salary of 1,20,000 p.a. and Boman is to get
commission @5% of net sales, which during the year was 30,00,000. Profit for the year ended 31
st
March,
2024 before providing for rent was 5,00,000.
Prepare Profit & Loss Appropriation Account for the year ended 31
st
March, 2024.
Q.15) Bhanu and Pratap are partners sharing profit equally. Their fixed capital as on 1
st
April,2023 were
8,00,000 and 10,00,000 respectively. Their drawings during the year were 50,000 and 1,00,000 respectively.
Interest on capital is a charge and is to be allowed @ 10% p.a. and interest on drawings is to be charged
@15% p.a. Net profit for the year ended 31
st
March, 2024 before giving effect to the above was 1,20,000.
Prepare profit and loss appropriation account.
st
April,2023 were
8,00,000 and 10,00,000 respectively. Their drawings during the year were 50,000 and 1,00,000 respectively.
Interest on capital is a charge and is to be allowed @ 10% p.a. and interest on drawings is to be charged
@15% p.a. Net profit for the year ended 31
st
March, 2024 before giving effect to the above was 1,20,000.
Prepare profit and loss appropriation account.
Q.16) A, B and C were partners in a firm having capitals of 50,000; 50,000 and 1,00,000 respectively. Their
current account balance were A 10,000; B 5,000 and C 2,000 (Dr.). According to the partnership deed the
partners were entitled to an interest on capital
@10% p.a. C being the working partners was also entitled to a salary of 12,000 p.a. the profit were to be
divided as:
a)The first 20,000 in proportion to their capitals
b)Next 30,000 in the ratio of 5:3:2.
c)Remaining profit to be shared equally
The firm earned profit of 1,72,000 before charging any of the above items.
Prepare profit and loss appropriation account.
current account balance were A 10,000; B 5,000 and C 2,000 (Dr.). According to the partnership deed the
partners were entitled to an interest on capital
@10% p.a. C being the working partners was also entitled to a salary of 12,000 p.a. the profit were to be
divided as:
a)The first 20,000 in proportion to their capitals
b)Next 30,000 in the ratio of 5:3:2.
c)Remaining profit to be shared equally
The firm earned profit of 1,72,000 before charging any of the above items.
Prepare profit and loss appropriation account.
Q.17) A and B are partners sharing profits equally. Their capitals as on 1
st
April, 2023 were 5,00,000 each.
Partners are allowed interest on capital @5%p.a. Drawings of each partner were 1,00,000. Salary is to be
allowed to B @ 5,000 per month. Net profit for the year ended 31
st
March, 2024 was 8,80,000. 10% of the net
divisible profit is to be set aside to General Reserve.
Prepare Profit and Loss Appropriation Account for the year ended 31
st
March, 2024.
st
April, 2023 were 5,00,000 each.
Partners are allowed interest on capital @5%p.a. Drawings of each partner were 1,00,000. Salary is to be
allowed to B @ 5,000 per month. Net profit for the year ended 31
st
March, 2024 was 8,80,000. 10% of the net
divisible profit is to be set aside to General Reserve.
Prepare Profit and Loss Appropriation Account for the year ended 31
st
March, 2024.
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
Methods of partners capital Account.
Q.18) X and Y are partners sharing profits and losses in the ratio of 7:3. Their Capital Accounts as at 1
st
April,
2023 were X 5,00,000; Y 4,00,000. Partners are allowed interest on capital @5% p.a. Drawings of the partners
during the year ended 31
st
March, 2024 were 72,000 and 50,000 respectively. Profit for the year before
allowing interest on capital and salary to Y @ 5,000 per month was 8,00,000. 10% of the net profit is to be set
aside to General Reserve.
Prepare Profit and Loss Appropriation Account for the year ended 31
st
March, 2024 and Capital Accounts of
the partners.
st
April,
2023 were X 5,00,000; Y 4,00,000. Partners are allowed interest on capital @5% p.a. Drawings of the partners
during the year ended 31
st
March, 2024 were 72,000 and 50,000 respectively. Profit for the year before
allowing interest on capital and salary to Y @ 5,000 per month was 8,00,000. 10% of the net profit is to be set
aside to General Reserve.
Prepare Profit and Loss Appropriation Account for the year ended 31
st
March, 2024 and Capital Accounts of
the partners.
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
Q.19) Ram and Shyam are partners in a firm sharing profits in the ratio of 3:2. They had given loan to the firm
of 30,000 in their profit-sharing ratio on 1
st
October,2022. The partnership deed on interest on loans from
partners. Compute interest payables by the firm to the partners, assuming the firm closes its books every year
on 31
st
March.
of 30,000 in their profit-sharing ratio on 1
st
October,2022. The partnership deed on interest on loans from
partners. Compute interest payables by the firm to the partners, assuming the firm closes its books every year
on 31
st
March.
Q.20) Bat and Ball are partners sharing the profits in the ratio of 2:3 with capitals of 1,20,000 and 60,000
respectively. On 1
st
October, 2022, Bat and Ball gave loans of 2,40,000 and 1,20,000 respectively to the firm.
Bat had allowed the firm to use his property for business for a monthly rent of 5,000. Loss for the year ended
31
st
March, 2023 before rent and interest amounted to 9,000. show distribution of profit/loss
respectively. On 1
st
October, 2022, Bat and Ball gave loans of 2,40,000 and 1,20,000 respectively to the firm.
Bat had allowed the firm to use his property for business for a monthly rent of 5,000. Loss for the year ended
31
st
March, 2023 before rent and interest amounted to 9,000. show distribution of profit/loss
Q.21) Atul, Jetha and Tarak are partners sharing profits equally. Jetha was given loan by the firm on 1
st
July,
2022 of 6,00,000. Books are closed on 31
st
March. Calculate interest on the following cases
a) Rate of interest is not agreed; and
b) Rate of interest to be charged is agreed @ 10% p.a.?
st
July,
2022 of 6,00,000. Books are closed on 31
st
March. Calculate interest on the following cases
a) Rate of interest is not agreed; and
b) Rate of interest to be charged is agreed @ 10% p.a.?
Q.22) Atul and Mithun are partners sharing profits in the ratio of 3:2
Balance as on 1
st
April,2022 were as follows:
Capital Account (fixed): Atul 5,00,000 and Mithun 6,00,000
Loan Accounts: Atul 3,00,000 cr. And Mithun 2,00,000 dr.
It was agreed to allow and charge interest @ 8% p.a. Partnership deed provides to allow interest on capital
@10% p.a. interest on drawings was charged 5,000 each.
Profit before giving effect to above was 2,28,000 for the year ended 31
st
March,2023
Prepare profit and loss appropriation account
Balance as on 1
st
April,2022 were as follows:
Capital Account (fixed): Atul 5,00,000 and Mithun 6,00,000
Loan Accounts: Atul 3,00,000 cr. And Mithun 2,00,000 dr.
It was agreed to allow and charge interest @ 8% p.a. Partnership deed provides to allow interest on capital
@10% p.a. interest on drawings was charged 5,000 each.
Profit before giving effect to above was 2,28,000 for the year ended 31
st
March,2023
Prepare profit and loss appropriation account
Q.23) Sonu and Ranu are partners sharing profits in the ratio of 3:2. Their capitals as on 1
st
April,2022 were
1,00,000 each whereas current accounts had balances of 25,000 and 12,500 respectively. Interest on capital is
to be allowed @5% p.a. net profit of the firm for the year ended 31
st
March, 2023 was 1,50,000.
Prepare profit and loss appropriation account for the year.
st
April,2022 were
1,00,000 each whereas current accounts had balances of 25,000 and 12,500 respectively. Interest on capital is
to be allowed @5% p.a. net profit of the firm for the year ended 31
st
March, 2023 was 1,50,000.
Prepare profit and loss appropriation account for the year.
Q.24) Amit and Bramit started business on 1
st
April, 2023 with capital of 15,00,000 and 9,00,000 respectively.
On 1
st
October, 2023 they decided that their capitals should be 12,00,000 each. The necessary adjustments in
capital were made by introducing or withdrawing by cheque. Interest on capital is allowed @ 8% p.a. compute
interest on capital for the year ended 31
st
March, 2024
st
April, 2023 with capital of 15,00,000 and 9,00,000 respectively.
On 1
st
October, 2023 they decided that their capitals should be 12,00,000 each. The necessary adjustments in
capital were made by introducing or withdrawing by cheque. Interest on capital is allowed @ 8% p.a. compute
interest on capital for the year ended 31
st
March, 2024
Q.25) Ashish and Aakash are partners sharing profit in the ratio of 3 : 2. Their Capital Accounts showed a credit
balance of ₹ 5,00,000 and ₹ 6,00,000 respectively as on 31st March, 2023 after debit of drawings during the year
of ₹ 1,50,000 and ₹ 1,00,000 respectively. Net profit for the year ended 31st March, 2023 was ₹ 5,00,000.
Interest on capital is to be allowed @ 10% p.a.
Prepare Profit and Loss Appropriation Account.
balance of ₹ 5,00,000 and ₹ 6,00,000 respectively as on 31st March, 2023 after debit of drawings during the year
of ₹ 1,50,000 and ₹ 1,00,000 respectively. Net profit for the year ended 31st March, 2023 was ₹ 5,00,000.
Interest on capital is to be allowed @ 10% p.a.
Prepare Profit and Loss Appropriation Account.
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
Q.26) A and B are partners sharing profits and losses in the ratio of 3:1. on 1
st
April,2022 their capital were:
A: 5,00,000 and B: 3,00,000. During the year ended 31
st
March, 2023 the firm earned a net profit of
5,00,000. the terms of partnership are:
a) Interest on capital is to be allowed @ 6% p.a.
b) A will get a commission @ 2% on net sales
c) B will get a salary of 5,000 per month
d) B will get a commission of 5% on profits after deduction of all expenses including such commission.
Partnership drawings for the year were: A 80,000 and B 60,000. Net sales for the year was 30,00,000. After
considering the above facts. You are required to prepare profit and loss appropriation account and
partner's capital accounts
st
April,2022 their capital were:
A: 5,00,000 and B: 3,00,000. During the year ended 31
st
March, 2023 the firm earned a net profit of
5,00,000. the terms of partnership are:
a) Interest on capital is to be allowed @ 6% p.a.
b) A will get a commission @ 2% on net sales
c) B will get a salary of 5,000 per month
d) B will get a commission of 5% on profits after deduction of all expenses including such commission.
Partnership drawings for the year were: A 80,000 and B 60,000. Net sales for the year was 30,00,000. After
considering the above facts. You are required to prepare profit and loss appropriation account and
partner's capital accounts
Q.27) Ali and Bahadur are partners in a firm sharing profits and losses as Ali 70% and Bahadur 30%. Their
respective capitals as at 1
st
April,2021 stand as Ali 25,000 and Bahadur 20,000. The partners are allowed
interest on capitals @5%p.a. Drawing of the partners during the year ended 31
st
march,2022 were 3,500
and 2,500 respectively.
Profit for the year before allowing interest on capital and annual salary of Bahadur ₹3,000 was 40,000
10% of divisible profit is to be transferred to reserve.
Prepare profit and loss Appropriation account and capital account recording the above transaction.
respective capitals as at 1
st
April,2021 stand as Ali 25,000 and Bahadur 20,000. The partners are allowed
interest on capitals @5%p.a. Drawing of the partners during the year ended 31
st
march,2022 were 3,500
and 2,500 respectively.
Profit for the year before allowing interest on capital and annual salary of Bahadur ₹3,000 was 40,000
10% of divisible profit is to be transferred to reserve.
Prepare profit and loss Appropriation account and capital account recording the above transaction.
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
PAST ADJUSTMENTS
Q.28) Azad and Benny are equal partners. Their capitals are 40,000 and 80,000 respectively. After the
accounts for the year had been prepared. It was noticed that interest @5% p.a. as provided in the
partnership deed was not credited to their capital account before distribution of profits. It is decided to
pass an adjustment entry in the beginning of the next year. Record the necessary journal entry.
accounts for the year had been prepared. It was noticed that interest @5% p.a. as provided in the
partnership deed was not credited to their capital account before distribution of profits. It is decided to
pass an adjustment entry in the beginning of the next year. Record the necessary journal entry.
Q.29) Ram, Shyam and Mohan were partners in a firm sharing profits and losses in the ratio of 2:1:2. Their capitals
were fixed at 3,00,000; 1,00,000 and 2,00,000. For the year ended 31st march, 2023 interest on capital was credited to
them @9% instead of 10% p.a. the profit for the year before charging interest was 2,50,000 show your working notes
and pass the necessary adjustment entry.
were fixed at 3,00,000; 1,00,000 and 2,00,000. For the year ended 31st march, 2023 interest on capital was credited to
them @9% instead of 10% p.a. the profit for the year before charging interest was 2,50,000 show your working notes
and pass the necessary adjustment entry.
Q.30) Sharma and Verma were partners in a firm sharing profits and losses in the ratio of 3:2. Their fixed capitals were
14,00,000 and 10,00,000 respectively. The partnership deed provided for the following:
(i) Interest on capital @ 10% per annum.
(ii) Interest on drawings @ 12% per annum.
During the year ended 31.03.2023, Sharma withdrew 2,00,000 and Verma withdrew 1,00,000. After preparing the
accounts for the year ended 31.03.2023, it was realised that interest on capital was not allowed and interest on
drawings was not charged.
Showing your working notes clearly pass necessary journal entries in the books of the firm to rectify the above error.
14,00,000 and 10,00,000 respectively. The partnership deed provided for the following:
(i) Interest on capital @ 10% per annum.
(ii) Interest on drawings @ 12% per annum.
During the year ended 31.03.2023, Sharma withdrew 2,00,000 and Verma withdrew 1,00,000. After preparing the
accounts for the year ended 31.03.2023, it was realised that interest on capital was not allowed and interest on
drawings was not charged.
Showing your working notes clearly pass necessary journal entries in the books of the firm to rectify the above error.
Q.31) P, Q and R were partners with fixed capital of ₹ 40,000, ₹32,000and ₹24,000. After distributing the profit of
₹48,000 for the year ended 31st March 2022 in their agreed ratio of 3 : 1 : 1 it was observed that:
(i) Interest on capital was provided at 10% p.a. instead of 8% p.a.
(ii) Salary of ₹ 12,000 was credited to P instead of Q.
You are required to pass a single journal entry in the beginning of the next year to rectify the above omissions.
₹48,000 for the year ended 31st March 2022 in their agreed ratio of 3 : 1 : 1 it was observed that:
(i) Interest on capital was provided at 10% p.a. instead of 8% p.a.
(ii) Salary of ₹ 12,000 was credited to P instead of Q.
You are required to pass a single journal entry in the beginning of the next year to rectify the above omissions.
Q.32) A, B, and C were partners. Their fixed Capitals were ₹ 60,000, ₹ 40,000, and ₹ 20,000 respectively. Their profit-
sharing ratio was 2 : 2 : 1. According to the Partnership Deed, they were entitled on capital @ 5% p.a. In addition, B was
also entitled to draw a salary of ₹ 1,500 per month. C was entitled to a commission of 5% on the profits after charging
the interest on capital, but before charging the salary payable to B. The net profits for the year, ₹ 80,000, were
distributed in the ratio of their capitals without providing for any of the above adjustments. Showing your workings
clearly, pass the necessary adjustment entry.
sharing ratio was 2 : 2 : 1. According to the Partnership Deed, they were entitled on capital @ 5% p.a. In addition, B was
also entitled to draw a salary of ₹ 1,500 per month. C was entitled to a commission of 5% on the profits after charging
the interest on capital, but before charging the salary payable to B. The net profits for the year, ₹ 80,000, were
distributed in the ratio of their capitals without providing for any of the above adjustments. Showing your workings
clearly, pass the necessary adjustment entry.
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
GUARANTEE OF PROFITS TO A PARTNER
In case of guarantee of profit any deficiency arising to such partners is born by the remaining partner in their profit
sharing ratio.
In case of guarantee of profit any deficiency arising to such partners is born by the remaining partner in their profit
sharing ratio.
Q.33) A, B and C were in partnership sharing profits and losses in the ratio of 4:2:1. it was provided that C’s
share in profit for a year would not be less than 75,000. Profit for the year ended 31
st
march,2022
amounted to 3,15,000. you are required to show the appropriation among the partners. The profit and loss
appropriation account is not required.
share in profit for a year would not be less than 75,000. Profit for the year ended 31
st
march,2022
amounted to 3,15,000. you are required to show the appropriation among the partners. The profit and loss
appropriation account is not required.
Q.34) P and Q were partners in a firm sharing profits in the ratio of 5:3. on 1
st
April, 2022 they admitted R
as a new partner for 1/8th share in the profits with a guaranteed profit of 75,000. The new profit-sharing
ratio between P and Q will remain the same but they agreed to bear any deficiency on account of
guarantee to R in the ratio of 3:2. the profit of the firm for the year ended 31
st
March, 2023 was 4,00,000.
Prepare profit and loss appropriation account of P, Q and R for the year ended 31
st
March,2023
st
April, 2022 they admitted R
as a new partner for 1/8th share in the profits with a guaranteed profit of 75,000. The new profit-sharing
ratio between P and Q will remain the same but they agreed to bear any deficiency on account of
guarantee to R in the ratio of 3:2. the profit of the firm for the year ended 31
st
March, 2023 was 4,00,000.
Prepare profit and loss appropriation account of P, Q and R for the year ended 31
st
March,2023
Q.35) Maanika, Bhavi and Komal are partners sharing profits in the ratio of 6:4:1. Komal is guaranteed a
minimum profit of 2,00,000. The firm incurred a loss of 22,00,000 for the year ended 31
st
March,2018.
Pass necessary journal entry regarding deficiency borne by Maanika and Bhavi and prepare Profit and Loss
appropriation Account.
minimum profit of 2,00,000. The firm incurred a loss of 22,00,000 for the year ended 31
st
March,2018.
Pass necessary journal entry regarding deficiency borne by Maanika and Bhavi and prepare Profit and Loss
appropriation Account.
Q.36) Asgar, Chaman and Dholu are partners in a firm. Their capital account stood at 6,00,000; 5,00,000
and 4,00,000 respectively on 1
st
April, 2022. They shared profit and losses in the proportion of 4:2:3.
Partners are entitled to interest on capital @8% per annum and salary to Chaman and Dholu @ 7,000 per
month and 10,000 per quarter respectively as per the provision of the partnership deed.
Dholu share of profit (excluding interest on capital but including salary) is guaranteed at a minimum of
1,10,000 p.a. Any deficiency arising on that account shall be met by Asgar. The profit for the year ended
31
st
March, 2023 amounted to 4,24,000.
Prepare profit and loss appropriation account for the year ended 31
st
March, 2023.
and 4,00,000 respectively on 1
st
April, 2022. They shared profit and losses in the proportion of 4:2:3.
Partners are entitled to interest on capital @8% per annum and salary to Chaman and Dholu @ 7,000 per
month and 10,000 per quarter respectively as per the provision of the partnership deed.
Dholu share of profit (excluding interest on capital but including salary) is guaranteed at a minimum of
1,10,000 p.a. Any deficiency arising on that account shall be met by Asgar. The profit for the year ended
31
st
March, 2023 amounted to 4,24,000.
Prepare profit and loss appropriation account for the year ended 31
st
March, 2023.
Q.37) The partners of a firm Alia, Bhanu and Chand distributed the profits for the year ended 31
st
March,
2017, 80,000 in the ratio of 3:3:2 without providing for the following adjustments:
a) Alia and Chand were entitled to a salary of 1,500 each per month
b) Bhanu was entitled for a commission of 4,000
c) Bhanu and Chand had guaranteed a minimum profit of 35,000 p.a. to Alia any deficiency to be borne
equally by Bhanu and Chand.
Pass the necessary journal entry for the above adjustments in the books of the firm. Show working clearly
st
March,
2017, 80,000 in the ratio of 3:3:2 without providing for the following adjustments:
a) Alia and Chand were entitled to a salary of 1,500 each per month
b) Bhanu was entitled for a commission of 4,000
c) Bhanu and Chand had guaranteed a minimum profit of 35,000 p.a. to Alia any deficiency to be borne
equally by Bhanu and Chand.
Pass the necessary journal entry for the above adjustments in the books of the firm. Show working clearly
Q.38) Amay, Anmol and Rohan entered into partnership on 1st July, 2022 to share profits and losses in the ratio
of 3:2:1. Amay guaranteed that Rohan’s share of profit after charging interest on capital @ 6% p.a would not be
less than ₹ 36,000 p.a. Their fixed capital balances are: ₹ 2,00,000, ₹ 1,00,000 and ₹ 1,00,000 respectively. Profit
for the year ended 31st March, 2023 was ₹1,38,000. Prepare Profit and Loss Appropriation A/c.
of 3:2:1. Amay guaranteed that Rohan’s share of profit after charging interest on capital @ 6% p.a would not be
less than ₹ 36,000 p.a. Their fixed capital balances are: ₹ 2,00,000, ₹ 1,00,000 and ₹ 1,00,000 respectively. Profit
for the year ended 31st March, 2023 was ₹1,38,000. Prepare Profit and Loss Appropriation A/c.
Q.39) A and B are in partnership sharing profits and losses in the ratio of 3:2. They admit C, their Manager
as a partner with effect from 1st April, 2022 for 1/4th share profits. C, while a Manager was in receipts of a
salary of 27,000 p.a. and a commission of 10% of net profit after charging such salary and commission. In
terms of the partnership deed any excess amount which C will be entitled to receive as a partner over the
amount which would have been due to him if he continued to be the Manager, will be borne by A. profit
for the year ended 31st March, 2023 amounted to 2,25,000.
Prepare profit and loss appropriation account for the year ended 31st March, 2023
as a partner with effect from 1st April, 2022 for 1/4th share profits. C, while a Manager was in receipts of a
salary of 27,000 p.a. and a commission of 10% of net profit after charging such salary and commission. In
terms of the partnership deed any excess amount which C will be entitled to receive as a partner over the
amount which would have been due to him if he continued to be the Manager, will be borne by A. profit
for the year ended 31st March, 2023 amounted to 2,25,000.
Prepare profit and loss appropriation account for the year ended 31st March, 2023
Q.40) Three chartered accountants Abhijit, Baljit and Charanjit from a partnership profit being shared in the
ratio of 3:2:1 subject to the following.
a) Charanjit share of profit guaranteed to be not less than 15,000 p.a.
b) Baljit gives a guarantee to the effect that gross fee earned by him for the firm shall be equal to his
average gross fee of the preceding five years when he was carrying on profession alone which on an
average works out at 25,000
The profit for the first year of the partnership is 75,000. the gross fee earned by Baljit for the firm is 16,000.
You are required to show profit and loss appropriation account after giving effect to the above.
ratio of 3:2:1 subject to the following.
a) Charanjit share of profit guaranteed to be not less than 15,000 p.a.
b) Baljit gives a guarantee to the effect that gross fee earned by him for the firm shall be equal to his
average gross fee of the preceding five years when he was carrying on profession alone which on an
average works out at 25,000
The profit for the first year of the partnership is 75,000. the gross fee earned by Baljit for the firm is 16,000.
You are required to show profit and loss appropriation account after giving effect to the above.
Thank you
NEED YOUR LOVE & SUPPORT
NEED YOUR LOVE & SUPPORT
Tags
Categories
GeneralDownload
Download Slideshow Get the original presentation fileQuick Actions
Statistics
- Views 272
- Slides 85
- Age 519 days
Related Slideshows
22
Pray For The Peace Of Jerusalem and You Will Prosper
RodolfoMoralesMarcuc
32 views
26
Don_t_Waste_Your_Life_God.....powerpoint
chalobrido8
33 views
31
VILLASUR_FACTORS_TO_CONSIDER_IN_PLATING_SALAD_10-13.pdf
JaiJai148317
31 views
14
Fertility awareness methods for women in the society
Isaiah47
30 views
35
Chapter 5 Arithmetic Functions Computer Organisation and Architecture
RitikSharma297999
28 views
5
syakira bhasa inggris (1) (1).pptx.......
ourcommunity56
30 views