TS Grewal Solutions<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\nTS Grewal Accountancy Class 12 Solutions Chapter 1 Accounting for Partnership Firms – Fundamentals<\/h2>\n
Question 1.<\/strong><\/span>
\nIn the absence of Partnership Deed, what are the rules relation to
\n(a) Salaries of partners,
\n(b) Interest on partners capitals
\n(c) Interest on partners loan
\n(d) Division of profit, and
\n(e) Interest on partners drawings
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 2.<\/strong><\/span>
\nFollowing differences have arisen among P, Q and R. State who is correct in each case:
\n(a) P used \u20b9 20,000 belonging to the firm and made a profit of\u00a0 \u20b9 5,000. Q and R want the amount to be given to the firm?
\n(b) Q used \u20b9 5,000 belonging to the firm and suffered a loss of \u20b9 1000. He wants the firm to bear the loss?
\n(c) P and Q want to purchase goods from a Ltd., R does not agree
\n(d) Q and R want to admit C as partner, P does not agree?
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 3.<\/strong><\/span>
\nA, B and C are partners in a firm. They do not have a Partnership Deed. At the end of the first year of the commencement of the firm, they have faced the following problems:
\n(a) A wants that interest on capital should be allowed to the partners but B and C do not agree.
\n(b) B wants that the partners should be allowed to draw salary but A and C do not agree.
\n(c) C wants that the loan given by him to the firm should bear interest @ 10% p.a. but A and B do not agree.
\n(d) A and B having contributed larger amounts of capital, desire that the profits should be divided in the ratio of their capital contribution but C does not agree.
\nState how you will settle these disputes if the partners approach you for purpose.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 4.<\/strong><\/span>
\nJaspal and Rosy were partners with capital contribution of \u20b9 10,00,000 and \u20b9 5,00,000 respectively. They do not have a Partnership Deed. Jaspal wants that profits of the firm should be shared in their capital ratio. Rosy convinced jaspal that profits should be shared equally. Explain how Rosy would have convinced Jaspal for sharing the profit equally.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 5.<\/strong><\/span>
\nHarshad and Dhiman are in partnership since 1st April, 2017. No partnership agreement was made. They contributed Rs 4,00,000 and 1,00,000 respectively as capital. In addition, Harshad advance an amount of Rs 1,00,000 to the firm on 1st October, 2017. Due to long illness, Harshad could not participate in business activities from 1st August to 30th September, 2017. The profit for the year ended 31st March, 2018 amounted to Rs 1,80,000. Dispute has arisen between Harshad and Dhiman.
\nHarshad Claims:
\n(i) He should be given interest @ 10% per annum on capital and loan;
\n(ii) Profit should be distributed in proportion of capital;
\nDhiman Claims:
\n(i) Profit should be distributed equally;
\n(ii) He should be allowed Rs 2,000 p.m. as remuneration for the period he managed the business in the absence of Harshad;
\n(iii) Interest on Capital and loan should be allowed @ 6% p.a.
\nYou are required to settle the dispute between Harshand and Dhiman. Also prepare Profit and Loss Appropriation Account.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 6.<\/strong><\/span>
\nA and B are partners from 1st April, 2017, without a Partnership Deed and they introduced capitals of\u00a0 \u20b9 35,000 and \u20b9 20,000 respectively. On 1st October, 2017, A advances a loan of \u20b9 8,000 to the firm without any agreement as to interest. The profit and Loss Account for the year ended 31st March, 2018 shows a profit of \u20b9 15,000 but the partners cannot agree on payment of interest and on the basis of division of profits.
\nYou are required to divide the profits between them giving reasons for your method.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 7.<\/strong><\/span>
\nA and B are partners in a firm sharing profits in the ratio of 3 : 2. They had advanced to the firm a sum of \u20b9 30,000 as a loan in their profit-sharing ratio on 1st October, 2017. 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.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 8.<\/strong><\/span>
\nA and B are partners in a firm sharing profits equally. They had advanced tot he firm a sum of \u20b9 30,000 as a loan in their profit-sharing ratio on 1st October, 2017. The Partnership Deed is silent on the question of interest on the loan from partners. Compute the interest payable by the firm to the partners, assuming the firm closes its books on 31st March each year.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 9.<\/strong><\/span>
\nX and Y are partners sharing profits and losses in the ratio of 2 : 3 with capitals \u20b9 2,00,000 and \u20b9 3,00,000 respectively. On 1st October, 2017, X and Y granted loans of \u20b9 80,000 and \u20b9 40,000 respectively to the firm. Show distribution of profits\/losses for the year ended 31st March, 2018 in each of the following alternative cases:
\nCase 1 : If the profits before interest for the year amounted to \u20b9 21,000.
\nCase 2 : If the profits before interest for the year amounted to \u20b9 3,000.
\nCase 3 : If the profits before interest for the year amounted to \u20b9 5,000.
\nCase 4 : If the loss before interest for the year amounted to \u20b9 1,400.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 10.<\/strong><\/span>
\nBat and Ball are partners sharing the profits in the ratio of 2 : 3 with capitals of \u20b9 1,20,000 and \u20b9 60,000 respectively. On 1st October, 2017, Bat and Ball granted lonas of \u20b9 2,40,000 and \u20b9 1,20,000 respectively to the firm. Bat had allowed the firm to use his property for business for a monthly rent of \u20b9 5,000. The loss for the year ended 31st March, 2018 before rent and interest amounted to \u20b9 9,000. Show distribution of profit\/loss.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 11.<\/strong><\/span>
\nA and B are partners. A’s Capital is \u20b9 1,00,000 and B’s Capital is \u20b9 60,000. Interest on capital is payable @ 6% p.a. B is entitled to a salary of \u20b9 3,000 per month. Profit for the current year before interest and salary to B is \u20b9 80,000. Prepare Profit and Loss Appropriation Account.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 12.<\/strong><\/span>
\nX, Y and Z are partners in a firm sharing profits in 2 : 2 : 1 ratio. The fixed capitals of the partners were : X \u20b95,00,000; Y \u20b9 5,00,000 and Z \u20b9 2,50,000 respectively. The Partnership Deed provides that interest on capital is to be allowed @ 10% p.a. Z is to be allowed a salary of \u20b9 2,000 per month. The profit of the firm for the year ended 31st March, 2018 after debiting Z’s salary was \u20b9 4,00,000. Prepare Profit and Loss Appropriation Account.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 13.<\/strong><\/span>
\nX and Y are partners sharing profits in the ratio of 3 : 2 with capitals of \u20b9 80,000 and \u20b9 60,000 respectively. Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of \u20b9 6,000 which has not been withdrawn. Profit for the year ended 31st march, 2018 before interest on capital but after charging Y’s salary amounted to \u20b9 24,000. A provision of 5% of the profit is to be made in respect commission to the manager. Prepare an account showing the allocation profits.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 14.<\/strong><\/span>
\nPrem and Manoj are partners in a firm sharing profits in the ratio of 3 : 2. The Partnership Deed provided that Prem was to be paid salary of \u20b9 2,500 per month and Manoj was to ger a commission of \u20b9 10,000 per year. Interest on capital was to be allowed @ 5% p.a. and interest on drawings was to be charged @ 6% p.a. Interest on Prem’s drawings was \u20b9 1,250 and on Manoj’s drawings was \u20b9 425. Interest on Capitals of the partners were \u20b9 10,000 and \u20b9 7,500 respectively. The firm earned a profit of \u20b9 90,575 for the year ended 31st March, 2018. Prepare Profit and Loss Appropriation Account of the firm.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 15.<\/strong><\/span>
\nReema and Seema are partners sharing profits equally. The Partnership Deed provides that both Reema and Seema will get monthly salary of Rs 15,000 each, Interest on Capital will be allowed @ 5% p.a. and Interest on Drawings will be charged @ 10% p.a. Their capitals were Rs 5,00,000 each and drawings during the year were Rs 60,000 each. The firm incurred a loss of Rs 1,00,000 during the year ended 31st March, 2018. Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2018.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 16.<\/strong><\/span>
\nBhanu and Partab are partners sharings profits eqully. Their fixed capitals as on 1st April, 2017 are \u20b9 8,00,000 and \u20b9 10,00,000 respectively. Their drawings the year were \u20b9 50,000 and \u20b9 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. Profit for the year ended 31st March, 2018 was \u20b9 1,20,000. Prepare Profit and Loss Appropriation Account.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 17.<\/strong><\/span>
\nAmar and Bimal entered into partnership on 1st April, 2017 contributing \u20b9 1,50,000 and \u20b9 2,50,000 respecitvely towards capital. The Partnership Deed provided for interest on capital @ 10% p.a. It also provided that Capital Accounts shall be maintained following Fixed Capital Accounts method. The firm earned net profit of \u20b9 1,00,000 for the year ended 31st March 2018. Pass the Journal entry for interest on capital.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 18.<\/strong><\/span>
\nKamal and Kapil ar partners having fixed capitals of \u20b9 5,00,000 each as on 31st March, 2017. Kamal introduced further captial of \u20b9 1,00,000 on 1st October, 2017 whereas Kapil withdrew \u20b9 1,00,000 on 1st October, 2017 out of capital. Interest on capital is to be allowed @ 10% p.a. The firm earned net profit of \u20b9 6,00,000 for the year ended 31st March 2018. Pass the Journal entry for interest on capital and prepare Profit and Loss Appropriation Account.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 19.<\/strong><\/span>
\nSimran and Reema are partners sharing profits in the ratio of 3 : 2. Their capitals as on 31st March, 2017 were \u20b9 2,00,000 each whereas Current Accounts had balances of \u20b9 50,000 and \u20b9 25,000 respectively interest is to be allowed @ 5% p.a. on balances in Capital Accounts. The firm earned net profit of \u20b9 3,00,000 for the year ended 31st March 2018. Pass the journal entries for interest on capital and distibution of profit. Also prepare Profit and Loss Appropriation Account for the year.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 20.<\/strong><\/span>
\nAnita and Ankita are partners sharing profits equally. Their capitals, maintained following Fluctuating Capital Accounts Method, as on 31st March, 2017 were \u20b9 5,00,000 and \u20b9 4,00,000 respectively. Partnership Deed provided to allow interest on capital @ 10% p.a. The firm earned net profit of \u20b9 2,00,000 for the year ended 31st March, 2018. Pass the journal entry for interest on capital.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 21.<\/strong><\/span>
\nAshish and Aakash are partners sharing profit in the ratio of 3 : 2. Their Capital Accounts showed a credit balance of \u20b9 5,00,000 and \u20b9 6,00,000 respectively as on 31st March, 2018 after debit of drawings during the year of \u20b9 1,50,000 and \u20b9 1,00,000 respectively. Net profit for the year ended 31st March was \u20b9 5,00,000. Interest on capital is to be allowed @ 10% p.a. Pass the journal entry for interest on capital and prepare Profit and Loss Appropriation Account.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 22.<\/strong><\/span>
\nNaresh and Sukesh are partners with capitals of \u20b9 3,00,000 each as on 31st March, 2018. Naresh had withdrawn \u20b9 50,000 against capital on 1st October, 2017 and also \u20b9 1,00,000 besides the drawings against capital. Sukesh also had drawings of \u20b9 1,00,000. Interest on capital is to be allowed @ 10% p.a. Net profit for the year was \u20b9 2,00,000, which is yet to be distributed. Pass the journal entries for interest on capital and distribution of profit.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 23.<\/strong><\/span>
\nOn 1st April, 2013, Jay and Vijay entered into partnership for supplying laboratory equipments to government schools situated in remote and backward areas. They contributed capitals of \u20b9 80,000 and \u20b9 50,000 respectively and agreed to share the profits in the ratio of 3 : 2. The partnership Deed provided that interest on capital shall be allowed at 9% per annum. During the year the firm earned a profit of \u20b9 7,800. Showing your calculations cleary, prepare Profit and Loss Appropriation Account of Jay and Vijay for the year ended 31st March, 2014.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 24.<\/strong><\/span>
\nA, B and C are partners in a firm. A and B are to get annual salary of \u20b9 1,20,000 p.a. each as they are fully involved in the business. Net profit for the year is \u20b9 4,80,000. Determine the share of profit to be credited to each partner.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 25.<\/strong><\/span>
\nA, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1 respectively. A is entitled to a commission of 10% on the net profit. Net profit for the year is \u20b9 1,10,000. Determine the amount of commission payable to A.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 26.<\/strong><\/span>
\nX, Y and Z are partners sharing profits and lossed equally. As per partnership Deed, Z is entitled to a commission of 10% on the net profit after charging such commission. The net profit before charging commission is \u20b9 2,20,000. Determine the amount of commission payable to Z.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 27.<\/strong><\/span>
\nA, B, C, and D are partners in a firm sharing profits as 4 : 3 : 2 : 1 respectively. It earned a profit of \u20b9 1,80,000 for the year ended 31st March, 2018. As per the Partnership Deed, they are to charge a commission @ 20% of the profit after charging such commission which they will share as 2 : 3 : 2 : 3. You are required to show appropriation of profits among the partners.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 28.<\/strong><\/span>
\nX and Y are partners in a firm. X is entitled to a salary of \u20b9 10,000 per month and commission of 10% of the net profit after partners salaries but before charging commission. Y is entitled to a salary of \u20b9 25,000 p.a. and commission of 10% of the net profit after chaging all commission and partners salaries. Net profit before providing for partners salaries and commission for the year ended 31st March, 2018 was \u20b9 4,20,000, show distribution of profit.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 29.<\/strong><\/span>
\nRam and Mohan, two partners, drew for their personal use \u20b9 1,20,000 and \u20b9 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 30.<\/strong><\/span>
\nB and M are partners in a firm. They withdrew \u20b9 48,000 and \u20b9 36,000 respectively during the year evenly in the middle of every month. According to the partnership agreement, interest on drawings is to be charged @ 10% p.a. Calculate interest on drawings of the partners using the appropriate formula.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 31.<\/strong><\/span>
\nA and B are partners sharing profits equally. A drew regularly \u20b9 4,000 in the beginning of every month for six months ended 30th September, 2018. Calculate interest on drawings @ 5% p.a. for a period of six months.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 32.<\/strong><\/span>
\nA and B are partners sharing profits equally. A drew regularly \u20b9 4,000 at the end of every month for six months ended 30th September, 2018. Calculate interest on drawings @ 5% p.a. for a period of six months.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 33.<\/strong><\/span>
\nCalculate interest on drawings of Mr. Ashok @ 10% p.a. for the year ended 31st March, 2018, in each of the following alternative cases:
\nCase 1. If he withdrew \u20b9 7,500 in the beginning of each quarte.
\nCase 2. If he withdrew \u20b9 7,500 at the end of each quarter.
\nCase 3. If he withdrew \u20b9 7,500 during the middle of each quarter.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 34.<\/strong><\/span>
\nKanika and Gautam are partners doing a dry cleaning business in Lucknow, sharing profits in the ratio 2 : 1 with capitals \u20b9 5,00,000 and \u20b9 4,00,000 respectively. Kanika withdrew the following amounts during the year to pay the hostel expenses of her son:
\n1st April \u20b9 10,000
\n1st June \u20b9 9,000
\n1st November \u20b9 14,000
\n1st December \u20b9 5,000
\nGautam withdrew \u20b9 15,000 on the first day of April, July, October and January to pay rent for the accommodation of his family. He also paid \u20b9 20,000 per month as rent for the office of partnership which was\u00a0 in a nearby shopping complex. Calculate interest on drawings @ 6% p.a.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 35.<\/strong><\/span>
\nA and B are partners sharing Profit and Loss in the ratio 3 : 2 having Capital Account balances of \u20b9 50,000 and \u20b9 40,000 on 1st April, 2017. On 1st July, 2017, A introduced \u20b9 10,000 as his additional capital whereas B introduced only \u20b9 1,000. Interest on capital is allowed to partners @ 10% p.a. Calculate interest on capital for the financial year ended 31st March, 2018.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 36.<\/strong><\/span>
\nRam and Mohan are partners in a business. Their capitals at the end of the year were \u20b9 24,000 and \u20b9 18,000 respectively. During the year, Ram’s drawings and Mohan’s drawings were \u20b9 4,000 and \u20b9 6,000 respectively. Profit (Before charging interest on capital) during the year was \u20b9 16,000. Calculate interest on capital @ 5% p.a. for the year ended 31st March, 2018.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 37.<\/strong><\/span>
\nFollowing is the extract of the Balance Sheet of Neelkant and Mahadev as on 31st March, 2018.
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\nDuring the year, Mahadev’s drawings were \u20b9 30,000. Profits during the year ended 31st March, 2018 is \u20b9 10,00,000. Calculate interest on capital @ 5% p.a. for the year ending 31st March, 2018.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 38.<\/strong><\/span>
\nFrom the following Balance Sheet of Long and Short, calculate interst on capital @ 8% p.a. for the year ended 31st March, 2018.
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\nDuring the year, Long withdrew \u20b9 40,000 and Short withdrew \u20b9 50,000. Profit for the year was \u20b9 1,50,000 out of which \u20b9 1,00,000 was transferred to General Reserve.
\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 39.<\/strong><\/span>
\nX and Y contribute \u20b9 20,000 and \u20b9 10,000 respectively towards capital. They decide to allow interest on capital @ 6% p.a. Their respective share of profits is 2 : 3 and the net profit for the year is \u20b9 1,500. Show distribution of profits:
\n(i) where there is no agreement except for interest on capitals; and
\n(ii) where there is an agreement that the interest on capital as a charge.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 40.<\/strong><\/span>
\nA and B started business on 1st April, 2017 with capitals of \u20b9 15,00,000 and \u20b9 9,00,000 respectively. On 1st October, 2017, they decided that their capitals should be \u20b9 12,00,000 each. The necessary adjustments in capitals were made by introducing or withdrawing by cheque. Interest on capital is allowed @ 8% p.a. Compute interest on capital for the year ended 31st March, 2018.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 41.<\/strong><\/span>
\nX and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2 . On 31st March, 2018 after closing the books of account, their Capital Accounts stood at \u20b9 4,80,000 and \u20b9 6,00,000 respectively. On 1st May, 2017, X introduced an additional capital of \u20b9 1,20,000 and Y withdrew \u20b9 60,000 form his capital.On 1st October, 2017, X withdrew \u20b9 2,40,000 from his capital and Y introduced \u20b9 3,00,000 . Interest on capital is allowed at 6% p.a. Subsequently, it was discovered that interest on capital @ 6% p.a. had been omitted. The profits for the year ended 31st March, 2018 amounted to \u20b9 2,40,000 and the partners’ drawings had been: X \u20b91,20,000 and Y \u20b9 60,000. Compute the interest on capital if the capitals are (a) fixed, and (b) fluctuating.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 42.<\/strong><\/span>
\nC and D are partners in a firm; C has contributed \u20b9 1,00,000 and D \u20b9 60,000 as capital. Interest in payable @ 6% p.a. and D is entitled to a salary of \u20b9 3,000 per month. In 2017-18, the profit was \u20b9 80,000 before interest and salary. Divide the amount between C and D.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 43.<\/strong><\/span>
\nAmit and Vijay started a partnership business on 1st April,2017. Their capital contributions were \u20b9 2,00,000 and \u20b9 1,50,000 respectively. The Partnership Deed provided that:
\n(a) Interest on capital be allowed @ 10% p.a.
\n(b) Amit to get a salary of \u20b9 2,000 per month and Vijay \u20b9 3,000 per month.
\n(c) Profits are to be shared in the ratio of 3 : 2.
\nProfit for the year ended 31st March, 2018 befor above appropriations was \u20b9 2,16,000. Interest on drawings amounted to \u20b9 2,200 for Amit and \u20b9 2,500 for Vijay. Prepare Profit and Loss Appropriation Account.
\nSolution:<\/strong><\/span>
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\n<\/p>\nQuestion 44.<\/strong><\/span>
\nShow how the following will be recorded in the Capital Accounts of the Partners Sohan and Mohan when their capitals are fluctuating:
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\nSolution:<\/strong><\/span>
\n<\/p>\nQuestion 45.<\/strong><\/span>
\nSajal and Kajal are partners sharing profits and losses in the ratio of 2 : 1. On 1st April, 2017 their Capitals were: Sajal \u20b9 50,000 and Kajal \u20b9 40,000.
\nPrepare Profit and Loss Appropriation Account and the Partners Capital Accounts at the end of the year after considering the following items:
\n(a) Interest on Capital is to be allowed @ 5% p.a.
\n(b) Interest on the loan advanced by Kajal for the whole year, the amount of loan being \u20b9 30,000.
\n(c) Interest on partners drawings @ 6% p.a. Drawings: Sajal \u20b9 10,000 and Kajal \u20b9 8,000.
\n(d) 10% of the divisible profit is to be transferred to Reserve.
\nThe net profit for the year ended 31st March, 2018 \u20b9 68,460.
\nNote: Net profit means net profit after debit of interest on loan by the partner.
\nSolution:<\/strong><\/span>
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