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Continue ReadingX, Y and Z entered into partnership on 1st October, 2021 to share profits in the ratio of 4: 3: 3. X, personally guaranteed that Z’s share of profit after charging interest on capital @ 10% p.a. would not be less then Rs. 80,000 in any year. Capital contributions were: X –Rs. 3,00,000, Y – Rs. 2,00,000 and Z – Rs. 1,50,000. Profit for the year ended 31st March, 2022 was Rs. 1,60,000. Prepare Profit and Loss Appropriation Account.
Continue ReadingCapitals of kajal, Neerav and Alisha as on 31st March, 2022 amounted to Rs. 90,000, Rs. 3,30,000 and Rs. 6,60,000 respectively. Profit of Rs. 1,80,000 for the year ended 31st March, 2022 was distributed in the ratio of 4: 1: 1 after allowing interest on Capital @10% p.a. During the year, each partner withdrew Rs. 3,60,000. The Partnership Deed was silent as to profit-sharing ratio but provided for interest on capital @ 12%. Pass the necessary adjustment entry showing the working clearly.
Continue ReadingAli the Bahadur are partners in a firm sharing profits and losses as Ali 70% and Bahadur 30%. Their respective capitals as at 1st April, 2021 stand as Ali Rs. 25,000 and Bahadur Rs. 20,000. The partners are allowed interest on capitals @ 5% p.a. Drawings of the partners during the year ended 31st March, 2022 amounted to Rs. 3,500 and Rs. 2,500 respectively. Profit for the year, before charging interest on capital and annual salary of Bahadur @ Rs. 3,000, amounted to Rs. 40,000, 10% of divisible profit is to be transferred to Reserve. Prepare Partners’ Current Account and Capital Accounts recording the above transactions.
Continue ReadingSajal and Kajal are partners sharing profits and losses in the ratio of 2: 1. On 1st April, 2021 their Capitals were: Sajal – Rs. 5,00,000 and Kajal – Rs. 4,00,000. Prepare Profit and Loss Appropriation Account and the Partners’ Capital Accounts at the end of the year after considering the following items: (a) Interest on Capital is to be allowed @ 5% p.a. (b) Interest on the loan advanced by Kajal for the whole year, the amount of loan being Rs. 3,00,000. (c) Interest on partners’ drawings @ 6% p.a. Drawings: Sajal Rs. 1,00,000 and Kajal Rs. 80,000. (d) 10% of the divisible profit is to be transferred to Reserve. Profit, before giving effect to the above, for year ended 31st March, 2022 is 7,02,600.
Continue ReadingYadu, Vidu and Radhu were partners in a firm sharing profits in the ratio of 4: 3: 3. Their fixed capitals 1st April, 2018 were Rs. 9,00,000, Rs. 5,00,000 and Rs. 4,00,000 respectively. On 1st November, 2018, Yadu gave a loan of Rs. 80,000 to the firm, as per the partnership agreement. (i) The partners were entitled to an interest on capital @ 6% p.a. (ii)Interest on partners’ drawings was to be charged@ 8% p.a. The firm earned profit of Rs. 2,53,000 (after interest on Yadu’s Loan) during the year 2018-19. Partners drawings for the year amounted to: Yadu – Rs. 80,000, Vidu – Rs. 70,000 and Radhu – Rs. 50,000. Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2019.