Accountancy

Nirmal and Pawan are partners sharing profits in the ratio of 3: 2. The firm had given loan to Pawan of Rs. 5,00,000 on 1st April, 2021. Interest was to be charged @ 10% p.a. The firm took loan of Rs. 2,00,000 from Nirmal on 1st October, 2021. Before giving effect to the above, the firm incurred a loss of Rs. 10,000 for the year ended 31st March, 2022. Determine the amount to be transferred to Profit and Loss Appropriation Account.

SOLUTION

Continue ReadingNirmal and Pawan are partners sharing profits in the ratio of 3: 2. The firm had given loan to Pawan of Rs. 5,00,000 on 1st April, 2021. Interest was to be charged @ 10% p.a. The firm took loan of Rs. 2,00,000 from Nirmal on 1st October, 2021. Before giving effect to the above, the firm incurred a loss of Rs. 10,000 for the year ended 31st March, 2022. Determine the amount to be transferred to Profit and Loss Appropriation Account.

Akhil and Bimal are partners sharing profits in the ratio of 3: 2. Akhil gave loan to the firm of Rs. 1,00,000 on 1st October, 2021. On the same date, the firm gave loan to Bimal of Rs. 1,00 000. They do not have an agreement as to interest. Akhil had also given his personal property for firm’s godown at a monthly rent of Rs. 5,000. Firm earns profit of Rs. 1,03,000 (before above adjustments) for the year ended 31st March, 2022. Show the distribution of profit for the year.

SOLUTION

Continue ReadingAkhil and Bimal are partners sharing profits in the ratio of 3: 2. Akhil gave loan to the firm of Rs. 1,00,000 on 1st October, 2021. On the same date, the firm gave loan to Bimal of Rs. 1,00 000. They do not have an agreement as to interest. Akhil had also given his personal property for firm’s godown at a monthly rent of Rs. 5,000. Firm earns profit of Rs. 1,03,000 (before above adjustments) for the year ended 31st March, 2022. Show the distribution of profit for the year.

Sita and Geeta are partners in a firm sharing profits in the ratio of 3: 2. They had advanced to the firm a sum of Rs. 30,000 as a loan 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.

SOLUTION Amount advanced by the Partners = Rs.  30,000Profit sharing ratio = 3: 2Advanced by Sita = 30,000 × 3 / 5 = 18,000Advanced by Geeta = 30,000 × 2 / 5 = 12,000Time Period (from October…

Continue ReadingSita and Geeta are partners in a firm sharing profits in the ratio of 3: 2. They had advanced to the firm a sum of Rs. 30,000 as a loan 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.

P, Q and R are partners sharing profits and losses in the ratio of 3: 3: 2 respectively. Their respective capitals are in their profit-sharing proportions. On 1st April, 2018, the total capital of the firm and the balance of General Reserve are Rs. 80,000 and Rs. 20,000 respectively. During the year 2018-19, the firm made a profit of Rs. 28,000 before charging interest on capital @ 5%. The drawings of the partners are P — Rs. 8,000; Q — Rs. 7,000; and R — Rs. 5,000. On 31st March, 2019, their liabilities were Rs. 18,000. On this date, they decided to dissolve the firm. The assets realised Rs. 1,08,600 and realisation expenses amounted to Rs. 1,800. Prepare necessary Ledger Accounts to close the books of the firm.

Solution

Continue ReadingP, Q and R are partners sharing profits and losses in the ratio of 3: 3: 2 respectively. Their respective capitals are in their profit-sharing proportions. On 1st April, 2018, the total capital of the firm and the balance of General Reserve are Rs. 80,000 and Rs. 20,000 respectively. During the year 2018-19, the firm made a profit of Rs. 28,000 before charging interest on capital @ 5%. The drawings of the partners are P — Rs. 8,000; Q — Rs. 7,000; and R — Rs. 5,000. On 31st March, 2019, their liabilities were Rs. 18,000. On this date, they decided to dissolve the firm. The assets realised Rs. 1,08,600 and realisation expenses amounted to Rs. 1,800. Prepare necessary Ledger Accounts to close the books of the firm.

At the time of dissolution of a partnership firm, the book value of sundry assets transferred to Realisation Account was Rs. 2,00,000. 50% of these sundry assets were taken by partner A at 20% discount, 40% of remaining assets were sold at a profit of 30% on cost. 5% of the balance was found obsolete and realised nothing. The remaining assets were taken over by a creditor in full settlement of his claim. Pass necessary Journal entries for the above. (C.B.S.E. 2019)

SOLUTION Journal DateParticularsL.FAmount (Dr.)Amount (Cr.) Cash / Bank A/c Dr.A’s Capital A/c    Dr.    To Realisation A/c(Assets realised and some assets take by Partner A) 52,00080,0001,32,000

Continue ReadingAt the time of dissolution of a partnership firm, the book value of sundry assets transferred to Realisation Account was Rs. 2,00,000. 50% of these sundry assets were taken by partner A at 20% discount, 40% of remaining assets were sold at a profit of 30% on cost. 5% of the balance was found obsolete and realised nothing. The remaining assets were taken over by a creditor in full settlement of his claim. Pass necessary Journal entries for the above. (C.B.S.E. 2019)

A and B are partners in a firm sharing profits in the ratio of 3: 2. Mrs. B has given a loan of Rs. 40,000 to the firm and A has also given a loan of Rs. 80,000 to the firm. The firm was dissolved and its assets realised Rs. 60,000. State the order of payment of Mrs. B’s loan and A’s loan assuming that there was no other third-party liability of the firm. (CBSE 2019 C)

SOLUTION Order of Payment:First, the third-party loan, i.e., Mrs. B's Loan will be paid then, Partner's Loan, i.e., A's Loan will be paid.

Continue ReadingA and B are partners in a firm sharing profits in the ratio of 3: 2. Mrs. B has given a loan of Rs. 40,000 to the firm and A has also given a loan of Rs. 80,000 to the firm. The firm was dissolved and its assets realised Rs. 60,000. State the order of payment of Mrs. B’s loan and A’s loan assuming that there was no other third-party liability of the firm. (CBSE 2019 C)

Varun and Arun are partners in a firm sharing profits and losses equally. On the date of dissolution of the partnership firm, Varun’s wife’s loan was Rs. 45,000, whereas Arun’s loan was Rs. 65,000. Which loan will be paid first and why? (CBSE 2019)

SOLUTION Varun's wife's loan will be paid first as it's an outside liability (third party liability').

Continue ReadingVarun and Arun are partners in a firm sharing profits and losses equally. On the date of dissolution of the partnership firm, Varun’s wife’s loan was Rs. 45,000, whereas Arun’s loan was Rs. 65,000. Which loan will be paid first and why? (CBSE 2019)

Pass the necessary journal entry for treatment of Partner’s loan appearing on the assets side of the Balance Sheet in case of dissolution of a partnership firm. (CBSE 2019)

SOLUTION Journal DateParticularsL.FAmount (Dr.)Amount (Cr.) Cash / Bank A/c Dr.    To Partner’s Loan A/c / Loans to Partner A/c(Loan to Partner by the firm received) --  -- Note: Partner's Loan appearing…

Continue ReadingPass the necessary journal entry for treatment of Partner’s loan appearing on the assets side of the Balance Sheet in case of dissolution of a partnership firm. (CBSE 2019)

Name an item which is transferred to credit side of Realisation Account at the time of dissolution of partnership firm, but does not involve cash payment. (C.B.S.E. 2020)

SOLUTION Any one of the following:— Provision for Doubtful Debts;— Accumulated Depreciation.

Continue ReadingName an item which is transferred to credit side of Realisation Account at the time of dissolution of partnership firm, but does not involve cash payment. (C.B.S.E. 2020)