Accountancy

Dev withdrew & 10,000 on 15th day of every month. Interest on drawings was to be charged @ 12 P.a. Calculate interest on Dev’s Drawings.

Solution Interest on Dev’s Drawings=10,000×12=1,20,000×12/100×6/12=7,200 Note; Interest on drawing will be calculated for 6 months as average, because same same amount withdrawn in the middle of every month during the year.

Continue ReadingDev withdrew & 10,000 on 15th day of every month. Interest on drawings was to be charged @ 12 P.a. Calculate interest on Dev’s Drawings.

Brij and Mohan are partners in a firm. They withdrew Rs. 48,000 and Rs. 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.

Solution Since, the drawings are made evenly at the middle of every month, therefore interest on drawings is calculated for a period of six months. Interest on Brij's Drawings = Rs. 48,000×10/100×6/12 = Rs. 2,400Interest on Mohan's Drawings…

Continue ReadingBrij and Mohan are partners in a firm. They withdrew Rs. 48,000 and Rs. 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.

Ram and Mohan, two partners, drew for their personal use Rs. 1,20,000 and Rs. 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?

Solution In this question, date of drawings made by the partners is not given. Therefore, interest on drawings is calculated on average basis for a period of six months. Interest…

Continue ReadingRam and Mohan, two partners, drew for their personal use Rs. 1,20,000 and Rs. 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?

X and Y are partners in a firm. X is entitled to a salary of Rs. 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 Rs. 25,000 p.a. and commission of 10% of the net profit after charging all commission and partners’ salaries. Net profit before providing for partners’ salaries and commission for the year ended 31st March, 2019 was Rs. 4,20,000. Show distribution of profit.

Solution

Continue ReadingX and Y are partners in a firm. X is entitled to a salary of Rs. 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 Rs. 25,000 p.a. and commission of 10% of the net profit after charging all commission and partners’ salaries. Net profit before providing for partners’ salaries and commission for the year ended 31st March, 2019 was Rs. 4,20,000. Show distribution of profit.

A, B, C, and D are partners in a firm sharing profits as 4: 3: 2: 1 respectively. It earned a profit of Rs. 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.

Solution

Continue ReadingA, B, C, and D are partners in a firm sharing profits as 4: 3: 2: 1 respectively. It earned a profit of Rs. 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.

X, Y and Z are partners sharing profits and losses 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 Rs. 2,20,000. Determine the amount of commission payable to Z.

Solution Net Profit before charging Commission = Rs. 2,20,000Commission to Z = 10% of on Net Profit after charging such commissionPartner' s Commission = (Net profit×Rate of commission)/ (100+Rate of commission)Z' s Commission = (2,20,000×10)/ (100+10)…

Continue ReadingX, Y and Z are partners sharing profits and losses 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 Rs. 2,20,000. Determine the amount of commission payable to Z.

A, 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 Rs. 1,10,000. Determine the amount of commission payable to A.

Solution Net Profit before charging commission = Rs. 1,10,000Commission to A = 10% of on Net Profit before charging such commission       Partner' s Commission = (Net profit×rate of commission)/100A' s Commission = (1,10,000×10)/100=11,000

Continue ReadingA, 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 Rs. 1,10,000. Determine the amount of commission payable to A.

Amar, Bhanu, and Charu are partners in a firm. Amar and Bhanu are to get annual salary of Rs. 1,20,000 p.a. each as they are fully involved in the business. Net profit for the year is Rs. 4,80,000. Determine the share of profit to be credited to each partner.

Solution

Continue ReadingAmar, Bhanu, and Charu are partners in a firm. Amar and Bhanu are to get annual salary of Rs. 1,20,000 p.a. each as they are fully involved in the business. Net profit for the year is Rs. 4,80,000. Determine the share of profit to be credited to each partner.

Amit and Bramit started business on 1st April, 2018 with capitals of Rs. 15,00,000 and Rs. 9,00,000 respectively. On 1st October, 2018, they decided that their capitals should be Rs. 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, 2019.

Solution

Continue ReadingAmit and Bramit started business on 1st April, 2018 with capitals of Rs. 15,00,000 and Rs. 9,00,000 respectively. On 1st October, 2018, they decided that their capitals should be Rs. 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, 2019.