Study Materials: Vedantu Innovations Pvt. Ltd. Score High With A Personal Teacher, Learn LIVE Online!

Study Materials
• JEE Main & Advanced – Free Study Material
• NEET UG – Free Study Material
• NCERT Solutions for Class 1 to 12
• NCERT Books PDF for Class 1 to 12
• ICSE & ISC Free Study Material
• Free Study Material for Kids Learning (Grade 1 to 5)
• Olympiad Free Study Material
• Reference Books (RS Aggarwal, RD Sharma, HC Verma, Lakhmir

Singh, Exemplar and More)
• Previous Year Question Paper CBSE & State Boards
• Sample Papers
• Access All Free Study Material Here
Vedantu Innovations Pvt. Ltd.

Score high with a personal teacher, Learn LIVE Online!
www.vedantu.com

Study Material
Downloaded from Vedantu
FREE LIVE ONLINE
MASTER CLASSES
FREE Webinars by Expert Teachers
About Vedantu
Vedantu is India’s largest LIVE online teaching platform
with best teachers from across the country.
Vedantu oﬀers Live Interactive Classes for JEE, NEET, KVPY,

NTSE, Olympiads, CBSE, ICSE, IGCSE, IB & State Boards for
Students Studying in 6-12th Grades and Droppers. Register for FREE
Awesome Master Teachers

Anand Prakash Pulkit Jain Vamsi Krishna
B.Tech, IIT Roorkee B.Tech, IIT Roorkee B.Tech, IIT Bombay
Co-Founder, Vedantu Co-Founder, Vedantu Co-Founder, Vedantu
My mentor is approachable and guides me My son loves the sessions and I can
in my future aspirations as well. already see the change.
Student - Ayushi Parent - Sreelatha
10,04,600+ 9,49,900+ 95% 95% Students of Regular
Hours of LIVE Learning Happy Students  Top Results

Tuitions on Vedantu scored
above 90% in exams!
FREE MASTER CLASS SERIES

 For Grades 6-12th targeting JEE, CBSE, ICSE & much more Register for FREE
 Free 60 Minutes Live Interactive classes everyday
 Learn from the Master Teachers - India’s best Limited Seats!
CHAPTER-2 – Accounting for Partnership Firms -
Fundamentals
Solution 1
In the absence of the Partnership Deed:
(a) Partners are not entitled to any salary.
(b) No interest will be charged on partner’s capital.
(c) Interest on partner’s loan is fixed at 6%.
(d) The profit of the partnership firm will be distributed equally
among all the partners.
(e) No interest is charged on partner’s drawings.
Solution 2
The following are the actions to be taken in each of the cases:
(a) P will have to pay ₹20,000 along with the profit he made of
₹5,000 to the company. This is because the money belongs to the
company. The principal-agent relationship is an arrangement
wherein; one entity legally appoints another entity to act on its
behalf. P being the agent cannot keep the money as his own as it
will be a conflict of interest in carrying out the act. Moreover,
according to The Partnership Act, ‘if a partner derives any profits
for himself from any transaction of the firm, or from the use of the
property or business connection of the firm or firm’s name, he shall
account for that profit and pay it to the firm’.
(b) Q has to pay the firm ₹5,000 along with the loss of ₹1000.
According to The Partnership Act, 1932, all the partners of a
partnership firm are liable for the losses made by their negligence.
Therefore, Q has to bear the losses.
Class XII www.vedantu.com TS Grewal Solutions

(Volume 1)
(c) P and Q can purchase goods from A Ltd. even if R does not
agree with them. A partner can purchase and trade products without
discussing it with the other partners. However, if a partner has
certain restrictions to purchase or trade the company’s properties
and a public notice is issues, all the partner’s will have to discuss
and take a decision.
(d) C cannot be inducted as a partner in the firm. According to The
Partnership Act, a new partner cannot be included in the firm if any
of the existing partners object to his admission. Since P does not
agree with Q and R, C cannot become a partner.
Solution 3
(a) According to The Partnership Act, interest on capital cannot
be granted to the partners in a partnership firm if a
partnership deed has not been signed between them
regarding interest on capital.
(b) In the absence of a partnership deed, the partners cannot be
entitles to any salary.
(c) In the absence of a partnership deed, the interest on loan is
always fixed at 6%. Therefore, the loan given by the firm to
C should bear an interest of 6%.
(d) According to the Partnership Act, in the absence of a
partnership deed, the profits of the firm will be distributed
equally among all the partners of the firm.

(Volume 1)
Solution 4
A partnership firm which does not have a partnership deed has a
number of fixed rules. According to The Partnership Act, 1932, a
company which does not have a partnership deed will have to
distribute all its profits equally among all the partners in the firm.
In this situation, Jaspal is not familiar with the rules of The
Partnership Act in the absence of a partnership deed. Therefore,
Rosy will have to convince him by explaining the provisions under
The Partnership Act, 1932.
Solution 5
The following are the solutions to settle the dispute between the two
partners:
Harshad’s Claims:
(i) According to The Partnership Act, in the absence of a
partnership deed, no interest will be given to partner’s capitals and
the interest on loan is fixed at 6%.
(ii) Under the Partnership Act, 1932, the profit of the firm cannot be
distributed in the ratio of partner’s capitals and will instead be
distributed equally among all the partners of the firm in the absence
of a partnership deed.
Dhiman Claims:
(i) Dhiman’s claim is actually valid here because under the
Partnership Act, 1932, the profit of the company should be
distributed equally among the partners of the firm in the absence of
a partnership deed.
(ii) Under the Partnership Act, 1932, partners cannot be entitled to
any salary if there is no partnership deed signed between them.

(Volume 1)
(iii) According to the Partnership Act, only the interest on loan is
fixed at 6% and there will be no interest on partner’s capitals in the
absence of a partnership deed.
Please find below the table of profit distribution:

Profit and Loss Adjustment Account
as on 31st March, 2019
Dr. Cr.
Particulars ₹ Particulars ₹
To Interest on Partner’s 3,000 By Profit and 1,80,000
Loan Loss A/c
Harshad: 1,00,000 x
(6/100) x (6/12)
To Profit and Loss 1,77,000

Appropriation A/c
Total 1,80,000 Total 1,80,000
Profit and Loss Appropriation Account

Dr. Cr.
To Profit By Profit and Loss 1,77,000
transferred to: Adjustment A/c
Harshad’s Capital:
88,500 1,77,000
Dhiman’s Capital:
88,500
(Volume 1)
Total 1,77,000 Total 1,77,000
Solution 6
Please find below the table of profit distribution between the
partners:
Profit and Loss Account
as on March 31, 2019
Dr. Cr.
To A’s interest on loan for 240 By Profit (before 15,000
6 months: interest)
(8,000 x 6% x 6/12)
To Profit transferred to:
A’s Capital A/c: 7,380
B’s Capital A/c: 7,380 14,760
Total 15,000 Total 15,000
Working Notes:
The interest on loan is fixed at 6% because there is no partnership
deed signed between the partners.
Profit after A’s loan interest = ₹ 15,000 − ₹ 240 = ₹ 14,760
Therefore, profit shared between the partners equally or in the ratio
1:1 =
A’s Capital: 14,760 x ½ = 7,380
B’s Capital: 14,760 x ½ =7,380
Solution 7
Amount of money advanced as loan by partners: ₹ 30,000
Profit Sharing Ratio of partners = 3:2
Therefore,
A’s advance = 30,000 x 3/5 = ₹18,000
(Volume 1)
B’s advance = 30,000 x 2/5 = ₹12,000
Interest on loan for 6 months (1st October – 31st March):
A’s advance interest = 18,000 x 6% x 6/12 = ₹540
B’s advance interest = 12,000 x 6% x 6/12 = ₹ 360
Note:
Interest on loan is fixed at 6% because of absence of partnership
deed.
Solution 8
Interest on loan for 6 months (1st October – 31st March):
X’s loan interest = 80,000 x 6% x 6/12 = ₹ 2,400
Y’s loan interest = 40,000 x 6% x 6/12 = ₹ 1,200
Case 1:
As on 31st March, 2019
Dr. Cr.
To X’s Loan Interest: By Profit (before 21,000
2,400 3,600 interest)
To Y’s Loan Interest:
1,200
X’s Capital A/c (17,400 x
2/5): 17,400
6,960
Y’s Capital A/c (17,400 x
3/5):
10,440
(Volume 1)
Total 21,000 21,000
Case 2:
Dr. Cr.
To interest on loan By Profit (before interest) 3,000
X’s Loan: 2,400 By Loss transferred to:
Y’s Loan: 1,200 X’s Capital A/c (600 x 2/5):
3,600 240
Y’s Capital A/c (600 x (3/5) 600
360
Case 3:
Dr. Cr.
To Interest on X’s Loan: 3,600 By Profit (before 5,000
2,400 interest)
Interest on Y’s Loan: 1,200
X’s Capital A/c (1400 x
2/5):
560 1,400
(Volume 1)
Y’s Capital A/c (1400 x
3/5):
840
Case 4:
Dr. Cr.
To Loss (before interest) 1,400 By Loss transferred to-
To Interest on X’s Loan: 2,400 X’s Capital A/c (5,000 x
2,400 1,200 2/5): 5,000
Interest on Y’s Loan: 2,000
1,200 Y’s Capital A/c (5,000 x
3/5):
3,000
Solution 9
Dr. Cr.
To Loss (before interest) 9,000 By Loss transferred to:
To Rent (5,000 x 12) 60,000 Bat’s Capital A/c:
(Volume 1)
To Bat’s loan Interest: 31,920 79,800
7,200 10,800 Ball’s Capital A/c:
Ball’s loan Interest: 47,880
3,600
Working Notes
Interest on loan for 6 months:
Bat’s loan interest = ₹ 2,40,000 z 6% x 6/12 = ₹7,200
Ball’s loan interest = ₹1,20,000 x 6% x 6/12 = ₹3,600
Distribution of Loss:
Bat: = 79,800 x 2/5 = ₹31,920
Ball = 79,800 x 3/5 = ₹47,880
Solution 10
Please find below the profit and loss appropriation account:
Profit and Loss Appropriation A/c
Dr. Cr.
To Interest on Capital: 9,600 By Profit and Loss 80,000
A (1,00,000 x 6%): 6,000 A/c (Net Profit)
B (60,000 x 6%): 3,600

(Volume 1)
To B’s salary (₹ 3,000 × 12) 36,000

A’s Capital A/c: 17,200 34,400
B’s Capital A/c: 17,200
Working Notes:
Distribution of Profit:
Divisible Profit = ₹ 80,000 – ₹ 9,600 – ₹ 36,000 = ₹ 34,400
Therefore, profit transferred to A & B = 34,400 x 1/2
= ₹17,200 each
Solution 11
Please find below the table of Profit and Loss Appropriation
Account:
as on 31st March 2018
Dr. Cr.
To Interest on By Profit and Loss A/c
Capital: (After Z’s salary net 4,00,000
X: 50,000 Profit)
Y: 50,000 1,25000

(Volume 1)
Z: 25,000
To Profit transferred
to:
X’s Capital A/c:
1,10,000 2,75,000
Y’s Capital A/c:
1,10,000
Z’s Capital A/c:
55,000
Total 4,00,000 Total 4,00,000
Working Note:
Interest on Capital
X’s Capital Interest = ₹5,00,000 x 10% = ₹50,000
Y’s Capital Interest = ₹5,00,000 x 10% = ₹50,000
Z’s Capital Interest = ₹2,50,000 x 10% = ₹25,000
Distribution of Profit
Profit sharing ratio = 2:2:1
X’s Profit = ₹2,75,000 x 2/5 = ₹ 1,10,000
Y’s Profit = ₹2,75,000 x 2/5 = ₹ 1,10,000
Z’s Profit = ₹2,75,000 x 1/5 = ₹ 55,000
Z’s salary will not be debited in the profit and loss
appropriation A/c because 4,00,000 profit is given after
adjusting Z’s salary.
Solution 12
Please find below the profit and loss adjustment account:
Profit and Loss Adjustment Account
Dr. Cr.
(Volume 1)
To Commission for 15,000 By Profit 2,40,000
Manager (3,00,000 x 5%) and Loss
A/c
(Net Profit
after Y’s
salary)
To profit transferred to:
Profit and Loss 2,85,000 By Y’s 60,000
Appropriation A/c Salary
Total 3,00,000 Total 3,00,000
Working Notes:
Manager’s Commission:
Profit for making Managers’ Commission = 2,40,000 + 60,000 (Y’s
Salary) = ₹3,00,000
Manager’s Commission = ₹(3,00,000 x 5/100) = ₹415,000
Capital Interest:
X’s Capital Interest = ) 8,00,000 x 5/100) = ₹40,000
Y’s Capital Interest = (₹6,00,000 x 5/100) = ₹30,000
Distribution of profit:
Profit = ₹2,85,000 − ₹ 60,000 − ₹ 70,000 = ₹1,55,000
X’s Profit= 1,55,000 x 3/5 = ₹93,000
Y’s Profit = 1,55,000 x 2/5 = ₹62,000
Solution 13
Please find below the table of profit and loss appropriation account:
Dr. Cr.
To Prem’s Salary (₹ 30,000 By Profit and Loss A/c 90,575
(Volume 1)
2,500 × 12) (Net Profit
To Manoj’s 30,000 By Interest on Drawings
Commission A/c:
To Capital Interest: Prem: 1,250 1,675
Prem (2,00,000 x 5%): Manoj: 425
10,000 17,500
Manoj (1,50,000 x 5%):
7,500
Prem’s Current A/c:
20,850 34,750
Manoj’s Current A/c:
13,900
Working Notes:
Distribution of profits among partners:
Profit sharing ratio = 3:2
Prem’s Profit = 34,750 x 3/5 = ₹20,850
Manoj’s Profit = 34,750 x 2/5 = ₹13,900
Solution 14
Please find below the table for profit and loss appropriation
account:
Dr. Cr.
To Profit and Loss 1,00,000 By Interest on Drawings 6,000
A/c A/c:

(Volume 1)
Reema: 3,000
Seema: 3,000
By Loss transferred to:
Reema: 47,000
Seema: 47,000 94,000
Total 1,00,000 Total 1,00,000
Working Notes:
Interest on Drawings for 6 months:
Reema = 60,000 x 10% x 6/12 = ₹3,000
Seema = 60,000 x 10% x 6/12 = ₹3,000
Note: Salary and capital will not be distributed to the partners as the
company has incurred a loss.
Solution 15
Please find below the table for profit and loss appropriation
account:
Dr. Cr.
To Capital Interest 1,80,000 By Profit and Loss 1,20,000
A/c: A/c
Bhanu’s Current A/c By Interest on
(8,00,000 x 10%): Drawings A/c:
80,000 Bhanu’s Current A/c: 11,250
Partab’s Current A/c 3,750
(10,00,000 x 10%):
(Volume 1)
1,00,000 Partab’s Current A/c:
7,500
By Loss transferred
to:
Bhanu’s Current A/c: 48,750
24,375
Partab’s Current A/c:
24,375
Total 1,80,000 Total 1,80,000
Working Note:
Interest on Drawings for 6 months:
Bhanu = 50,000 x 15% x 6/12 = ₹3,750
Partab = 1,00,000 x 15% x 6/12 = ₹7,500
Note: If the date of withdrawal of drawings is not given, assume it
to be 6 months.
Solution 16
Please find below the journal entries of the transactions:
Journal Book
Date Particulars L.F. Debit Credit
₹ ₹
31st Profit & Loss Appropriation Dr. 40,000
March A/c 15,000
To Amar’s Current A/c 25,000
To Bimal’s Current A/c
(Being transfer of interest
on capital to profit and loss
appropriation A/c)
Working Notes:
(Volume 1)
Interest on Capital:
Amar = 1,50,000 x 10% = ₹15,000
Bimal = 2,50,000 x 10% = ₹25,000
Solution 17
Journal Book
₹ ₹
31st Profit & Loss Dr. 1,00,000
March Appropriation A/c
To Kamal’s Current A/c 55,000
To Kapil’s Current A/c 45,000
(Being interest on capital
transferred to profit and
loss appropriation account)
Please find below the transactions under profit and loss
appropriation account:
(Volume 1)
Dr. Cr.
To Capital Interest 1,00,000 By Profit and Loss 6,00,000
A/c: A/c
Kamal: 55,000
Kapil: 45,000
to:
Kamal’s Current A/c:
2,50,000
Kapil’s Current A/c: 5,00,000
2,50,000
Total 6,00,000 Total 6,00,000
Working Notes:
Kamal = (5,00,000 x 10% x 6/12) + (6,00,000 x 10% x 6/12) =
25,000 + 30,000 = 55,000
Kapil = (5,00,000 x 10% x 6/12) + (4,00,000 x 105 x 6/12) =
25,000 + 20,000 = 45,000
Solution 18
Journal Book
₹ ₹
Profit & Loss Appropriation Dr. 20,000
A/c
To Simran’s Current A/c 10,000
To Reema’s Current A/c 10,000

(Volume 1)
(Being transfer of interest on
capital to Profit & Loss
Appropriation A/c)
Profit & Loss Appropriation Dr. 2,80,000
A/c
To Simran’s Current A/c 1,68,000
To Reema’s Current A/c 1,12,000
(Being transfer of profit to
Partners’ Current A/c)

Profit and Loss Appropriation a/c
for the year ended 31st March, 2019
Dr. Cr.
To Interest on Capital 20,000 By Profit and Loss 3,00,000
A/c: A/c
Simran: 10,000 3,00,000
Reema: 10,000
To Profit transferred to: 2,80,000
Simran’s Current A/c 3,00,000
1,68,000
Reema’s Current A/c
1,12,000
Total 3,00,000 Total 3,00,000
Working Notes:
(Volume 1)
Simran = 2,00,000 x 5% = ₹ 10,000
Reema = 2,00,000 x 5% = ₹ 10,000
Solution 19
Please find below the journal entries for the transactions:
Journal
2019 Profit & Loss Appropriation Dr. 90,000
31st A/c 50,000
March To Anita’s Capital A/c 40,000
To Ankita’s Capital A/c
(Being transfer of interest on
capital to Profit & Loss
Appropriation A/c)
Working Notes 1:
Interest on capital:
Anita = 5,00,000 x 10% = ₹50,000
Ankita = 4,00,000 x 10% = ₹40,000
Solution 20
(Volume 1)
Please find below the journal entries of the following transactions:
Journal Book
₹ ₹
31st Profit & Loss Dr. 1,35,000
March Appropriation A/c 65,000
To Ashish’s Capital A/c 70,000
To Aakash’s Capital A/c
transferred to Profit &
Loss Appropriation A/c)
Profit & Loss 3,65,000
Appropriation A/c
To Ashish’s Capital A/c 2,19,000
To Akash’s Capital A/c 1,46,000
(Being transfer of profit
to Partners’ Capital A/c)
Total 500,000 500,000
Working Notes:
Calculation of Opening Capital:
Particulars Ashish Aakash
Capital at the end of the year 5,00,000 6,00,000
(+) Drawings made 1,50,000 1,00,000
Capital at the beginning of the year 6,50,000 7,00,000
Ashish = 6,50,000 x 10% = ₹65,000
Aakash = 7,00,000 x 10% = ₹70,000
Solution 21
(Volume 1)
Journal Book
Date Particulars L.F. Debit ₹ Credit
₹
March Profit & Loss Dr. 82,500
31 Appropriation A/c
To Naresh’s Capital A/c 42,500
To Sukesh’s Capital A/c 40,000
(Being transfer of interest
on capital to Profit & Loss
Appropriation A/c)
Profit & Loss Dr. 1,17,500
Appropriation A/c 58,750
To Naresh’s Capital A/c 58,750
To Sukesh’s Capital A/c
(Profit transferred to
Partners’ Capital A/c)
Working Notes:
Calculation of Opening Capital:
Particulars Naresh Sukesh
(+) Capital drawings out 50,000 –
(+) Profit drawings against 1,00,000 1,00,000
Capital at the beginning of the year 4,50,000 4,00,000
Naresh = (4,50,000 x 10% x 6/12) + (4,00,000 x 10% x 6/12) =
22,500 + 20,000 = 42,500
Sukesh = (4,00,000 x 10% x 6/12) + 4,00,000 x 10% x 6/12) =
40,000 + 20,000 = 40,000
(Volume 1)
Solution 22
Please find below the profit and loss appropriation account for the
transactions:
as on March 2014
Dr. Cr.
Particulars Amount Particulars Amount
To Interest on Capital By Profit and Loss 7,800
A/c: A/c
Jay: 4,800 7,800
Vijay: 3,000
Working Notes
Jay = 80,000 x 9% = ₹7,200
Vijay = 50,000 x 9% = ₹4,500
Total Interest = 7,200 + 4,500 = ₹ 11,700
Proportionate Interest on Capital Evaluation:

Jay Proportionate Interest = 7,200/11,700 x 7,800 = ₹4,800
Vijay Proportionate Interest = 4,500/11,700 x 7,800 = ₹3,000
(Volume 1)
Solution 23
Please find below the profit and loss account of the transactions:
Dr. Cr.
To Salary: By Profit and Loss 4,80,000
Amar: 1,20,000 A/c
Bhanu: 1,20,000 2,40,000
to:
Amar’s Capital A/c:
80,000
Bhanu’s Capital A/c:
80,000
Charu’s Capital A/c: 2,40,000
80,000
Total 4,80,000 Total 4,80,000
Solution 24
Net Profit before Commission = ₹1,10,000

(Volume 1)
A’s commission = 10% of net profit before commission was
charged
Therefore, A’s commission = Net Profit x rate/100 = 1,10,000 x
10/100 = ₹ 11,000
Solution 25
Net Profit before Commission = ₹2,20,000
Z’s Commission = Net Profit 10% after charging commission
Therefore, A’s commission = Net Profit x rate/100 + rate
= 2,20,000 x 10/110 = ₹ 20,000
Solution 26
Please find below the profit and loss account for the transactions:
for the year ended 31st March, 2018
Dr. Cr.
To Partners’ By Profit and Loss A/c 1,80,000
Commission: (Net Profit)
A: 6,000
B: 9,000
C: 6,000 30,000
D: 9,000
to:
A’s Capital A/c:
60,000
B’s Capital A/c: 1,50,000
(Volume 1)
45,000
C’s Capital A/c:
30,000
D’s Capital A/c:
15,000
Total 1,80,000 Total 1,80,000

Working Notes:
Partners’ Commission = Net Profit 20% after commission charged
= 1,80,000 x 20/120 = ₹30,000
Partners’ Commission Ratio = 2:3:2:3

A’s Commission = 30,000 x 2/10 = ₹ 6,000
B’s Commission = 30,000 x 3/10 = ₹ 9,000
C’s Commission = 30,000 x 2/10 = ₹ 6,000
D’s Commission = 30,000 x 3/10 = ₹ 9,000
= ₹ 1,80,000 − ₹ 30,000 = ₹ 1,50,000
Profit Sharing Ratio = 4:3:2:1
A’s Commission = 1,50,000 x 4/10 = ₹ 60,000
B’s Commission = 1,50,000 x 3/10 = ₹ 45,000
C’s Commission = 1,50,000 x 2/10 = ₹ 30,000
D’s Commission = 1,50,000 x 1/10 = ₹ 15,000
Solution 27
Please find below the profit and loss appropriation account of the
transactions:
(Volume 1)
Dr. Cr.
To Partners’ Salary: By Profit and Loss A/c 4,20,000
X (10,000 × 12): (Net Profit)
1,20,000
Y: 25,000 1,45,000
To Partners’
Commission:
X: 27,500
Y: 22,500 50,000
to:
X’s Capital A/c:
1,12,500
Y’s Capital A/c:
1,12,500 2,25,000
Total 4,20,000 Total 4,20,000
Working Note:
X’s Commission = Net Profit @ 10% after partners’ salaries.
Profit after Partner’s Salaries = 4,20,000 − 1,45,000 = ₹2,75,000
X ‘s Commission = 2,75,000 x 10% = ₹27,500
Y’s Commission = Net Profit @ 10% after partners’ salaries and
Commission
Profit after partners’ salaries and commission = 4,20,000 − 1,45,000
− 27,500 = ₹ 2,47,500
Y’s Commission = 2,47,500 x 10% = ₹22,500
Distribution of Profits:
Profit = 4,20,000 − 1,45,000 − 50,000 = ₹ 2,25,000
(Volume 1)
X = 2,25,000 x 1/2 = ₹1,12,500
Y = 2,25,000 x 1/2 = ₹1,12,500
Solution 28
Ram’s Drawing Interest = 1,20,000 x 6% x 6/12 = ₹3,600
Mohan’s Drawing Interest = 80,000 x 6% x 6/12 = ₹2,400
Note: If the date of withdrawal of drawings is not mentioned,
assume it to be 6 months.
Solution 29:
Interest on drawings is calculated for 6 months.
Brij’s Drawings Interest = ₹48,000 x 10% x 6/12 = ₹2,400
Mohan’s Drawings Interest = ₹ 36,000 x 10% x 6/12 = ₹1,800
Solution 30
Drawing amount = 4,000
Number of Drawing = 6
Total Drawings = 4,000 X 6 = ₹ 24,000
Rate of Interest = 5%
Time Period = Time after 1st drawing + Time after last drawing
= 6 + 12/2 = 3.5 months
Interest on Drawings = Total Drawings x Rate/100 x Time/12
= 24,000 x 5% x 3.5/12 = 350
Solution 31
(Volume 1)
Drawings Amount = ₹ 9,000 per quarter
Annual Drawings = ₹ (9,000 x 4) = ₹ 36,000
Interest Rate on Drawings = 6% p.a.
Average Time Time after first drawings + Time after last
=
Period drawing/2
= 9 + 0/2
Interest on Drawing Interest = Total Drawings x rate/100
=
Drawings x time/12
= (36,000 x 6% x 4.5/12) = ₹ 810
Solution 32
Given:
Drawing amount = 4,000
Number of Drawing = 6
Total Drawings = 4,000 X 6 = ₹ 24,000
Rate of Interest = 5%
Time = Time after 1st drawing + Time after last drawing/2 = 5 + 0/2
= 2.5 months
Interest on Drawings = Total Drawings x rate/100 x time/12
= 24,000 x 5/100 x 2.5/12 = 250
Solution 33
Given:
Drawings Total = 7,500 × 4 = ₹ 30,000
Interest Rate = 10%
Case 1:
The interest on drawings is calculated for 7.5 months when money
is withdrawn in the beginning of each quarter.
Drawing Interest = Total Drawings x rate/100 x time/12
(Volume 1)
Therefore, Ashok’s interest on drawings = 30,000 x 10/100 x 7.5/12
= ₹1,875
Case 2:
The interest on drawings is calculated for 4.5 months when money
is withdrawn at the end of each quarter.
Therefore, Ashok’s interest on drawing = 30,000 x 10/100 x 4.5/12
= ₹1,125
Case 3:
The interest on drawings is calculated for 6 months when money is
withdrawn in the middle of each quarter.
Therefore, Ashok’s interest on drawing = 30,000 x 10/100 x 6/12 =
₹1,500
Solution 34
Kanika’s interest on drawings = ₹ 1,500
Gautam’s interest on drawings = ₹ 2,250
Working Notes:
Kanika’s Interest on Drawings:
By Product Method
Date Amount Months Product
(I) (II) (I × II)
1st April 10,000 12 1,20,000
1st June 9,000 10 90,000
1st November 14,000 5 70,000
1st December 5,000 4 20,000
Product Sum 3,00,000
Interest on Drawings = Total product sum X rate/100 x time/12
(Volume 1)
= 3,00,000 x 6% x 1/12 = ₹1,500
Gautam’s Interest on Drawings:
Gautam withdrew ₹15,000
Interest on Drawings = Total product sum X rate/100 x time/12
= (15,000×4) x 6% x 7.5/12 = ₹2,250
Solution 35
Calculation of A’s Interest on Capital:
Date Capital Period Product
(Capital x Period)
1st April, 2018 to 50,000 3 1,50,000
30th June, 2018
1st July, 2018 to 31st 60,000 9 5,40,000
March, 2019
Total 6,90,000
A’s Interest on Capital = Total product sum x rate/100 x time/12
= 6,90,000 x 10% x 1/12 = ₹5,750
Calculation of B’s Interest on Capital:
Date Capital Period Product
(Capital x
Period)
1st April, 2018 to 30th June, 2018 40,000 3 1,20,000
1st July, 2018 to 31st March, 2019 41,000 9 3,69,000
Total 4,89,000
B’s Interest on Capital = Total product sum x rate/100 x time/12
= 4,89,000 x 10% x 1/12 = ₹4,075
Solution 36
(Volume 1)
Capital Interest is evaluated on the partner’s capital opening
balance.
Particulars Ram Mohan
Capital at the end 24,000 18,000
(-) Profit credited (1:1) (8,000) (8,000)
(+) Debited Drawings 4,000 6,000
Capital at the beginning 20,000 16,000
Ram’s Interest on Capital = ₹20,000 x 5% = ₹1,000
Mohan’s Interest on Capital = ₹16,000 x 5% = ₹800
Note: Partner’s interest on capital is calculated on partner’s opening
balance.
Solution 37
Neelkant’s Interest on Capital = 10,00,000 x 5% = ₹50,000
Mahadev’s Interest on Capital = 10,00,000 x 5% = ₹ 50,000
Note: Both the capital and current accounts of Neelkant and
Mahadev are given in the Solution. This means that the partners’
capitals are fixed. In such a situation, only the current accounts of
the partners’ get affected.
Solution 38
Calculation of Interest on Capital:
Particulars Long Short
₹ ₹
Less: Profit Adjusted (1,50,000 – 1,00,000) in (25,000) (25,000)
1:1 ratio
Add: Drawings Adjusted 40,000 50,000
Capital in the beginning 1,35,000 1,65,000
(Volume 1)
Long’s Capital Interest = 1,35,000 x 8% = ₹10,800
Short’s Capital Interest = 1,65,000 x 8% = ₹13,200
Solution 39
Calculation on Interest on Capital:
Moli = ₹20,000 x 6% = ₹1,200
Bholi = ₹10,000 x 6% = ₹600
Total Interest = 1,200+600 = ₹1,800
Case 1:
When there is no agreement except for interest on capitals
Profit at the end of the year = ₹1,500
Total Interest = ₹1,800
When there is no agreement on the distribution of capital interest,
the partners will distribute it according to the ratio of their capital
interest.
The ratio of Moli and Bholi’s interest on capital = 1,200:600 or, 2:1
Therefore,
Moli’s Interest on Capital = 1,500 x 2/3 = ₹1,000
Bholi’s Interest on Capital = 1,500 x 1/3 = ₹500
Case 2:
Moli’s Interest on Capital = 20,000 x 6% = ₹ 1,200
Bholi’s Interest on Capital = 10,000 x 6% = ₹ 600
Total Interest 1,200 + 600 = ₹ 1,800
Firm’s total profit = ₹1,500
Since the firm is under a loss, the loss will be distributed among the
partners in the ratio of their profit sharing ratio = 2:3
Moli = 300 x 2/5 = ₹120
Bholi = 300 x 3/5 = ₹180

(Volume 1)
Solution 40
Calculation of Amit’s Capital Interest:
Date Capital Period Product (Capital x
Period)
1st April, 2018 to 30th 15,00,000 6 90,00,000
Sept, 2018
1st Oct. 01, 2018 to 31st 12,00,000 6 72,00,000
March, 2019
Total 1,62,00,000
Amit’s Interest on Capital = Total x rate/100 x 1/12
= 1,62,00,000 x 8% x 1/12 = ₹ 1,08,000
Calculation of Bramit’s Capital Interest:
Date Capital Period Product ( Capital x
Period)
1st April, 2018 to 30th 9,00,000 6 54,00,000
Sept, 2018
1st Oct. 01, 2018 to 12,00,000 6 72,00,000
31st March, 2019
Total 1,26,00,000
Bramit’s Interest on Capital = Total x rate/100 x 1/12
= 1,26,00,000 x 8% x 1/12 = ₹ 84,000

(Volume 1)
Solution 41
(a) When the capitals are fixed:
Calculation of Opening Capital
Particulars Simrat Bir
Capital at the end of the Year 4,80,000 6,00,000
Add: Drawings 2,40,000 60,000
Less: Additional Capital 1,20,000 3,00,000
Opening Capital 6,00,000 3,60,000
Simrat’s Interest on Capital = (6,00,000 x 6% x 1/12) + (7,20,000 x
6% x 5/12) + (4,80,000 x 6% x 6/12) = ₹35,400
Bir’s Interest on Capital = (3,60,000 x 6% x 1/12) + (3,00,000 x 6%
x 5/12) + (6,00,000 x 6% x 6/12) = ₹27,300
(b) When capitals are fluctuating:
Calculation of Opening Capital

Particulars Simrat Bir
Capital at the end of the Year 4,80,000 6,00,000
Add: Drawings 2,40,000 60,000
Add: Drawings 1,20,000 60,000
Less: Additional Capital 1,20,000 3,00,000

(Volume 1)
Less: Profit credited 1,44,000 96,000
Opening Capital 5,76,000 3,24,000
Simrat’s Interest on Capital = (5,76,000 x 6% x 1/12) + (6,96,000 x

6% x 5/12) + (4,56,000 x 6% x 5/12) = ₹ 33,960
Bir’s Interest on Capital = (3,24,000 x 6% x 1/12) + ( 2,64,000 x
6% x 5/12) + (5,64,000 x 6 % x 6/12) = ₹25,140
Solution 42
Please find below the profit and loss appropriation account of
transactions:
Dr. Cr.
To Interest on By Profit and Loss A/c (Net 80,000
Capitals: Profit)
C: 6,000 9,600
D: 3,600
To D salary (3000 x 36,000
12)
to:
C’s Capital A/c: 34,400
17,200
D’s Capital A/c:
17,200

(Volume 1)
Working Notes:
C’s Capital Interest = 1,00,000 x 6% = ₹6,000
D’s Capital Interest = 60,000 x 6% = ₹3,600
Available profit for distribution = 80,000 − 9,600 − 36,000 =
₹34,400
Profit sharing between C and D equally = ₹ 34,400 x 1/2 = ₹17,200
each
Therefore,
Total amount of money C received = Capital Interest + Profit Share
= ₹6,000 + ₹17,200 = ₹23,200
Total amount of money D received = Interest on Capital + Salary +
Profit Share
= ₹3,600 + ₹36,000 + ₹17,200 = ₹56,800
Solution 43
Please find below the profit and loss account of the transactions:
Dr. Cr.
To Interest on By Profit and Loss A/c 2,16,000
Capital: (Net Profit)
Amit: 20,000 35,000 By Drawings Interest
Vijay: 15,000 A/c: 4,700
To Salary to: Amit: 2,200
Amit (2,000 × 12): Vijay: 2,500
24,000 60,000
(Volume 1)
Vijay (3,000 × 12):
36,000
To Profit transferred 1,25,700
to:
Amit’s Capital A/c:
75,420
Vijay’s Capital A/c:
50,280
Total 2,20,700 Total 2,20,700
Working Notes:
Amit’s = 2,00,000 x 10% = ₹20,000
Vijay = 1,50,000 x 10% = ₹15,000
Calculation of Profit Distribution:
Divisible Profit = ₹2,16,000 + ₹4,700 − ₹35,000 − ₹60,000 = ₹1,
25,700
Amit = 1,25,700 x 3/5 = ₹75,420
Vijay = 1,25,700 x 2/5 = ₹50,280
Solution 44
Please find below the table for partner’s capital accounts:
Partners’ Capital Accounts
Dr. Cr.
Particular Sohan Mohan Particulars Sohan Mohan
s
To 50,000 30,000 By Balance 4,00,00 3,00,00
Drawings b/d 0 0
A/c

(Volume 1)
To Interest 1,250 750 By Interest 20,000 15,000
on on Capital
Drawings A/c
A/c
By P&L 60,000 50,000
To Balance 4,69,75 3,37,25 Appropriatio
c/d 0 0 n A/c
By Partners’ 36,000 –
Salary
By 5,000 3,000
Commission
Total 5,21,00 3,68,00 Total 5,21,00 3,68,00
0 0 0 0
Working Note:
Sohan = 4,00,000 x 5% = ₹20,000
Mohan = 3,00,000 x 5% = ₹15,000
Solution 45
Please find below the transactions under profit and loss account:
Profit and Loss A/c as on 31st March, 2019
Dr. Cr.
By Kajal’s interest on loan 1,800 To Profit 70,260
By Profit transferred to P/L 68,460
Appropriation A/c

(Volume 1)
Profit and Loss Appropriation A/c as on 31st March, 2019
Dr. Cr.
To Capital Interest A/c: 4,500 By Profit and Loss A/c 68,460
Sajal: 2,500 By Drawings Interest
Kajal: 2,000 A/c:
To Reserve 6,450 Sajal: 300 540
To Profit transferred to: Kajal: 240
Sajal’s Capital A/c:
38,700 58,050
Kajal’s Capital A/c:
19,350
Please find below the transactions under partner’s capital account:
Dr. Cr.
Particulars Sajal Kajal Particulars Sajal Kajal
To Drawings 10,000 8,000 By Balance b/d 50,000 40,000
A/c
To Interest on 300 240 By Interest on 2,500 2,000
Drawings A/c Capital A/c
By P&L
Appropriation 38,700 19,350
A/c
To Balance c/d 80,900 53,110
(Volume 1)
Total 91,200 61,350 Total 91,200 61,350
Working Notes:
Calculation of Interest on Capital
Sajal= 50,000 x 5% = ₹2,500
Kajal = 20,000 x 5% = ₹2,000
Calculation of Interest on Drawings:
Sajal = 10,000 6% x 6/12 = ₹300
Kajal = 20,000 x 6% x 6/12 = ₹240
Calculation of amount transferred to Reserve:
Reserve Amount = 10% of Divisible Profit
Divisible Profit = Profit + Interest on Drawings − Interest on
Capital = 68,460 + 540 − 4,500 = 64,500
Therefore, Reserve Amount = 64,500 x 10% = ₹6,450
Available Profit = 68,460 + 540 − 4,500 − 6,450 = ₹ 58,050
Profit sharing ratio = 2 : 1
Sajal= 58,050 x 2/3 = ₹38,700
Kajal = 58,050 x 1/3 = ₹19,7350
Solution 46
Profit and Loss Appropriation Account as on 31st March, 2019
Dr. Cr.
To Interest on 4,800 By Profit and Loss A/c 50,000
Capital: (Net Profit)
A: 3,000
B: 1,800
To B’s Salary (500 x 6,000
(Volume 1)
12)
To Partner’s
Commission 7,581
A: 6,000
B: 1,581
to:
23,714
B’s Capital A/c:
7,905
Partners’ Capital A/c
Dr. Cr.
Particulars A B Particulars A B
To Drawings 8,000 6,000 By Balance b/d 50,000 30,000
A/c
By Capital 3,000 1,800
Interest A/c
By Commission 6,000 1,581
A/c
By Salary A/c 6,000
To Balance 74,714 41,286 By P/L 23,714 7,905
c/d Appropriation
A/c
Total 82,714 47,286 Total 82,714 47,286
Working Notes:
Calculation of interest on capital:
(Volume 1)
A = 50,000 x 6% = ₹3,000
B = 30,000 x 6% = ₹1,800
Calculation of partner’s commission:
A = 2% on turnover = 2% x 3,00,000 = ₹6,000
B = 5% on profit after all expenses along with commission
Profits after all expense = ₹50,000 − ₹4,800 − ₹6,000 −₹6,000 =
₹33,200
Therefore, B’s Commission = Profits after all expense x rate/100 +
rate
= 33,200 x 5/105 = ₹1,581
Available Profit = ₹ 50,000 −₹ 4,800 − ₹ 6,000 − ₹ 7,581 = ₹
31,619
A = 31,619 x 3/4 = ₹23,714
B = 31,619 x 1/4 = ₹7,905
Solution 47
Dr. Cr.
To Interest By Profit and 1,72,000
on Capital: Loss A/c (Net
A: 5,000 Profit)
B: 5,000 20,000
C: 10,000
To Salary to 12,000
(Volume 1)
C
To Profit
transferred
to:
A’s Current
A/c: 50,000
B’s Current
A/c: 44,000 1,40,000
C’s Current
A/c: 46,000
Total 1,72,000 Total 1,72,000
Please find below the journal entries for the transactions:
Journal Entry
Capital Interest A/c Dr. 20,000
To A’s Current A/c 5,000
To B’s Current A/c 5,000
To C’s Current A/c 10,000
transferred to partners)
Salary A/c Dr. 12,000
To C’s Current A/c 12,000
(Being C’s Salary)
Profit and Loss Dr. 1,40,000
Appropriation A/c 50,000
To A’s Current A/c 44,000
To B’s Current A/c 46,000
To C’s Current A/c
(Being profit transferred to

(Volume 1)
partners’ current accounts)
Total 1,72,000 1,72,000

Working Notes:
Calculation of interest on capital:
A = 50,000 x 10% = ₹5,000
B = 50,000 x 10% = ₹5,000
C = 1,00,000 x 10% = ₹10,000
Available Profits = ₹1,72,000 − ₹20,000 − ₹12,000 = ₹1,40,000
(a) Distribution of ₹ 20,000 in the ratio of partner’s capital = 1:1:2
A = 20,000 x 1/4 = ₹5,000
B = 20,000 x 1/4= ₹5,000
C = 20,000 x 2/4= ₹10,000
(b) Distribution of ₹ 30,000 in 5:3:2
A = 30,000 x 5/10= ₹15,000
B = 30,000 x 3/10= ₹9,000
C = 30,000 x 2/10= ₹6,000
(c) Remaining Profit for distribution = ₹ 1,40,000 − ₹ 20,000 − ₹
30,000 = ₹ 90,000
The remaining ₹ 90,000 profit will be shared between the partners.
A, B, and C will each get = 90,000 x 1/3 = ₹30,000
Therefore, the total profits of partners:
A = 5,000 + 15,000 + 30,000 = ₹50,000
B = 5,000 + 9,000 + 30,000 = ₹44,000
C = 10,000 + 6,000 + 30,000 = ₹46,000

(Volume 1)
Solution 48
Please find below the transactions under profit and loss account:
Profit and Loss A/c
Dr. Cr.
To Manager’s Commission By Profit before 1
(5% of Rs 15,000) 750 B’s Salary
To Transferred Profit t to (12,500 + 2,500) 5,000
Profit and Loss Appropriation 14,250
A/c

Dr. Cr.
To Interest on Capital By Profit and Loss 14,250
A/c: A/c
A: 3,000 4,800
B: 1,800
To B’s Salary 2,500
B’s Capital A/c: 2,780 6,950
Total 14,250 14,250
(Volume 1)
Dr. Cr.
Particulars A B Particulars A B
To Balance 57,170 37,080 By Balance b/d 50,000 30,000
c/d
By Interest on 3,000 1,800
Capital A/c
By Salary A/c 2,500
By P/L 4,170 2,780
Appropriation A/c
Total 57,170 37,080 Total 57,170 37,080
Working Notes:
Calculation of Manager’s Commission:
Managers’ Commission = 5% on Net Profit (before Salary)
Profit before Salary = Profit after Salary + Salary = 12,500 + 2500
= ₹ 15,000
Therefore, Managers’ Commission = 15,000 x 5% = ₹750
Calculation of Interest on Capital
A = 50,000 6% = ₹3,000
B = 50,000 6% = ₹1,800
Profit available for distribution = ₹ 12,500 − ₹ 750 − ₹ 3,000 − ₹
1,800 = ₹ 6,950
Profit Sharing Ratio = 3:2
A = 6,950 x 3/5 = ₹4,170
B = 6,950 x 2/5 = ₹2,750
(Volume 1)
Solution 49
Dr. Cr.
To Interest on Capital: By Profit (after Salary) 21,000
P: 2,000
Q: 1,500
R: 1,500 5,000
Profit transferred to:
P’s Capital A/c: 7,000
Q’s Capital A/c: 5,000 16,000
R’s Capital A/c: 4,000 21,000
Partners’ Capital A/c
Dr. Cr.
Particula P Q R Particular P Q R
rs s
To 10,00 10,00 10,00 By Balance 40,00 30,00 30,00
Drawings 0 0 0 b/d 0 0 0
A/c
By Salaries – 6,000 4,000
A/c
By Capital 2,000 1,500 1,500
Interest A/c
To 39,00 32,50 29,50 By P/L 7,000 5,000 4,000
(Volume 1)
Balance 0 0 0 Appropriati
c/d on A/c
Total 49,00 32,50 29,50 Total 49,00 32,50 29,50
0 0 0 0 0 0
Working Notes:
Calculation of Interest on Capitals:
P = 40,000 x 5% = ₹2,000
Q = 30,000 x 5% = ₹1,500
R = 30,000 x 5% = ₹1,500
Available Profit for distribution = ₹ 21,000 −₹ 5000 = ₹ 16,000
(a) Distribution of first ₹ 10,000 as P 50%, Q 30%, and R
20%
P = 10,000 x 50% = ₹5,000
Q = 10,000 x 30% = ₹3,000
R = 10,000 x 20% = ₹2,000
(b) Distribution of remaining profit ₹ 6,000 (16,000 −
10,000) equally
P, Q, and R = 6,000 x 1/3 = ₹2,000 each
Therefore, the total profits:
P = 5,000 + 2,000 = ₹7,000
Q = 3,000 + 2,000 = ₹5,000
R = 2,000 + 2,000 = ₹4,000
Solution 50
Please find below the transactions under the profit and loss
(Volume 1)
Dr. Cr.
To Interest on Capital: By Profit and Loss A/c 45,000
A: 2,500
B: 1,500
C: 1,000 5,000
To Salary to:
B: 5,000
C: 5,000 10,000
A’s Current A/c: 15,000
B’s Current A/c: 9,000
C’s Current A/c: 6,000 30,000

Dr. Cr.
Particula A B C Particula A B C
rs rs
To 50,00 30,00 20,00 By 50,00 30,00 20,00
Balance 0 0 0 Balance 0 0 0
c/d b/d
Total 50,00 30,00 20,00 Total 50,00 30,00 20,00
0 0 0 0 0 0
Please find below the transactions under partner’s current account:
Partners’ Current Accounts
Dr. Cr.
Particula A B C Particular A B C
(Volume 1)
rs s
To 10,00 7,500 6,000 By Balance 4,500 1,500 1,000
Drawings 0 b/d
A/c
By Interest 2,500 1,500 1,000
on Capital
A/c
By Salaries - 5,000 5,000
A/c
To 12,00 9,500 7,000 By P/L 15,00 9,000 6,000
Balance 0 Appropriati 0
c/d on A/c
Total 22,00 17,00 13,00 Total 22,00 17,00 13,00
0 0 0 0 0 0
Working Notes:
A = 50,000 x 5% = ₹2,500
B = 30,000 x 5% = ₹1,500
C = 20,000 x 5% = ₹1,000
Available Profit for Distribution = ₹ 45,000 −₹ 15,000 = ₹ 30,000
A = 30,000 x 1/2 = ₹15,000
B = 30,000 x 3/10 = ₹9,000
C = 30,000 x 1/15 = ₹6,000
Solution 51
Please find below partner’s capital account:

(Volume 1)
Dr. Cr.
Particulars Ali Bahadur Particulars Ali Bahadur
By Balance 25,000 20,000
b/d
To Balance 25,000 20,000
c/d
Total 25,000 20,000 Total 25,000 20,000
Working Notes:
Partners’ Current Accounts
Dr. Cr.
Particulars Ali Bahadur Particulars Ali Bahadur
To 3,500 2,500 By Interest on 1,250 1,000
Drawings Capital A/c
A/c
By Bahadur’s 3,000
Salary A/c
To Balance 19,642 10,883 By P/L 21,892 9,383
c/d Appropriation
A/c
Total 23,142 13,383 Total 23,142 13,383

Dr. Cr.
To Interest on Capital: By Profit and Loss 40,000
A/c
Ali 1,250

(Volume 1)
Bahadur 1,000 2,250
To Reserve 3,475
To Bahadur’s Salary 3,000
Ali’s Capital A/c 21,892
Bahadur’s 9,383 31,275
Capital A/c
Ali’s Capital Interest = 25,000 x 5/100 = ₹1,250
Bahadur’s Capital Interest = 20,000 x 5/100 = ₹1,000
Calculation of Reserve:
Amount transferred to Reserve =10% of Divisible Profits
=10/100 x (40,000− 2,250− 3,000) = ₹3,475
Calculation of Partner’s Profit Sharing
Profit available for distribution = 40,000 − 2,250 − 3,000 − 3,475
= 31,275
Ali’s Profit Share = 31,275 x 70/100 = ₹1,892
Bahadur’s Profit Share = 31,275 x 30/100 = ₹9,383
Solution 52
Please find below the profit and loss account appropriation account:
Dr. Cr.
To Capital Interest: By Profit and Loss 33,360
Amal: 2,000 4,750 A/c
Bimal: 1,500 (Net Profit)
Kamal: 1,250
(Volume 1)
Amal Salary(250 x 12) 3,000
To Commission to 985
Bimal
To General Reserve 2,462
Amal’s Capital A/c:
7,388
Bimal’s Capital A/c:
7,388
Kamal’s Capital A/c:
7,387 22,163
Please find below partner’s capital accounts:

Dr. Cr.
Particul Ama Bim Kam Particular Ama Bim Kam
ars l al al s l al al
By Balance 40,0 30,0 25,00
b/d 00 00 0
By Capital 2,00 1,50 1,250
Interest A/c 0 0
By Salary 3,00 – –
A/c 0
By – 985 –
(Volume 1)
Commissio
n
To 52,3 39,8 33,63 By P/L 7,38 7,38 7,387
Balance 88 73 7 Appropriati 8 8
c/d on A/c
Total 52,3 39,8 33,63 Total 52,3 39,8 33,63
88 73 7 88 73 7
Working Notes:
Amal’s Capital Interest = 40,000 x 5/100 = ₹2,000
Bimal’s Capital Interest = 30,000 x 5/100 = ₹1,500
Kamal’s Capital Interest = 25,000 x 5/100 = ₹1,250
Calculation of Bimal’s Commission
Bimal Commission = 4/100 on Net Profits after Commission
Profit after expenses = ₹33,360 − ₹4,750 − ₹3,000 = ₹25,610
Bimal’s Commission = Profit after Expenses x Rate/100 + Rate
Therefore, = 25,610 x 4/104 = ₹985
Calculation of amount to be transferred to General Reserve:
General Reserve Amount = 10% of Profit
= (33,360 – 4,750 – 3,000 – 985) x 10/100
= 24,625 x 10/100 = ₹2,462
Calculation of Partner’s Profit Share:
Available Profit for Distribution = ₹33,360 − ₹4,750 − ₹3,000−
₹985 − ₹2,462 = ₹22,163
Profit Share for each Partners’ Amal, Bimal, and Kamal = 22,163 x
/13 = ₹7,388
Solution 53
(Volume 1)
Dr. Cr.
Particulars Amount Particulars ₹
To Interest on 30,000 By Profit and Loss 5,00,000
Capital: A/c (Net Profit)
Amit: 5,000
Binita: 10,000
Charu: 15,000
To Salary to Amit 1,20,000
(10,000 x 12)
To Commission to 23,810
Binita
To General 50,000
Reserve
To Profit
transferred to:
Amit’s Capital A/c:
92,063
Binita’s Capital
A/c: 92,063
Charu’s Capital 2,76,190
A/c: 92,064
33,360 33,360
Dr. Cr.
Particul Amit Binit Char Particula Amit Binit Char
ars a u rs a u
By 1,00,0 2,00,0 3,00,0
(Volume 1)
Balance 00 00 00
b/d
By 5,000 10,00 15,00
Interest on 0 0
Capital
A/c
By Salary 1,20,0 – –
A/c 00
By – 23,81 –
Commissi 0
on
To 3,17,0 3,25,8 4,07,0 By P/L 92,06 92,06 92,06
Balance 63 73 64 Appropria 3 3 4
c/d tion A/c
Total 3,17,0 3,25,8 4,07,0 Total 3,17,0 3,25,8 4,07,0
63 73 64 63 73 64
Working Notes:
Calculation of Capital Interest :
Amit = 1,00,000 x 5/100 = ₹5,000
Binita = 2,00,000 x 5/100 = ₹10,000
Charu = 3,00,000 x 5/100 = ₹15,000
Calculation of Binita’s Commisssion:
Binita’s Commission = Net Profit x Rate/100 + Rate
= 5,00,000 x 5/105 = ₹23,810
Calculation of amount to be transferred to General Reserve:
Amount for General Reserve = 10% of Profit
= 5,00,000 x 10/100 = ₹50,000
Calculation of Partners’ Profit Share
Profit for Distribution = ₹5,00,000 – ₹30,000 – ₹1,20,000 – ₹23,810
– ₹50,000
(Volume 1)
= ₹2,76,19
Profit of each partner = 2,76,190 x 1/3 = ₹92, 063
Solution 54
Dr. Cr.
To Capital Interest: 30,000 By Profit and Loss A/c 5,00,000
Anita: 5,000 (Net Profit)
Bimla: 10,000
Cherry: 15,000
To Anita Salary 60,000
(5,000 × 12)
To Bimla’s 23,810
Commission
To General Reserve 38,619
to:
Anita’s Capital A/c:
1,15,857 3,47,571
Bimla’s Capital A/c:
1,15,857
Cherry’s Capital A/c:
1,15,857
Total 5,00,000 Total 5,00,000

(Volume 1)
Dr. Cr.
Particulars Anita Bimla Cherry Particulars Anita Bimla
By Balance 1,00,000 2,00,000
b/d
By Interest on 5,000 10,000
Capital A/c
By Salary A/c 60,000 –
By – 23,810
Commission
To Balance 2,80,857 3,49,667 4,30,857 By P/L 1,15,857 1,15,857
c/d Appropriation
A/c
Total 2,80,857 3,49,667 4,30,857 Total 2,80,857 3,49,667
Working Notes:
Anita’s Interest = 1,00,000 x 5/100 = ₹5,000
Bimla’s Interest = 2,00,000 x 5/100 = ₹10,000
Cherry’s Interest = 3,00,000 x 5/100 = ₹15,000
Calculation of Bimal’s Commission
Bimla’s Commission = Net Profit x Rate/100 + Rate
= 5,00,000 x 5/100 = ₹23,810
Calculation of amount to be transferred to General Reserve
Evaluation
Amount for General Reserve = 10% of Divisible Profit
=3,86,190 x 10/100 = ₹38,619
Divisible Profit = ₹5,00,000 – ₹30,000 – ₹23,810 – ₹60,000 =
₹3,86,190
Calculation of Partners’ Profit Share:
(Volume 1)
Profit available for Distribution = ₹5,00,000 – ₹30,000 – ₹60,000 –
₹23,810 – ₹38,619
= ₹3,47,571
Profit share of each partner’s = 3,47,571 x 1/3 = ₹1,15,857

(Volume 1)
 Thank You
for downloading the PDF
FREE LIVE ONLINE
MASTER CLASSES
FREE Webinars by Expert Teachers
FREE MASTER CLASS SERIES

 For Grades 6-12th targeting JEE, CBSE, ICSE & much more Register for FREE
 Free 60 Minutes Live Interactive classes everyday
 Learn from the Master Teachers - India’s best Limited Seats!

Study Materials: Vedantu Innovations Pvt. Ltd. Score High With A Personal Teacher, Learn LIVE Online!

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Study Materials: Vedantu Innovations Pvt. Ltd. Score High With A Personal Teacher, Learn LIVE Online!

Uploaded by

Copyright:

Available Formats

Study Materials

• JEE Main & Advanced – Free Study Material

• NEET UG – Free Study Material

• NCERT Solutions for Class 1 to 12

• NCERT Books PDF for Class 1 to 12

• ICSE & ISC Free Study Material

• Free Study Material for Kids Learning (Grade 1 to 5)

• Olympiad Free Study Material

• Reference Books (RS Aggarwal, RD Sharma, HC Verma, Lakhmir

• Previous Year Question Paper CBSE & State Boards

• Access All Free Study Material Here

Vedantu Innovations Pvt. Ltd.

FREE LIVE ONLINE

Vedantu oﬀers Live Interactive Classes for JEE, NEET, KVPY,

Awesome Master Teachers

Student - Ayushi Parent - Sreelatha

10,04,600+ 9,49,900+ 95% 95% Students of Regular

Hours of LIVE Learning Happy Students  Top Results

FREE MASTER CLASS SERIES

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

Please find below the table of profit distribution:

To Profit and Loss 1,77,000

Total 1,80,000 Total 1,80,000

Profit and Loss Appropriation Account

Class XII www.vedantu.com TS Grewal Solutions

To Profit transferred to:

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

Please find below the profit and loss appropriation account:

Proportionate Interest on Capital Evaluation:

Class XII www.vedantu.com TS Grewal Solutions

Total 1,80,000 Total 1,80,000

Partners’ Commission Ratio = 2:3:2:3

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

(b) When capitals are fluctuating:

Calculation of Opening Capital

Class XII www.vedantu.com TS Grewal Solutions

Simrat’s Interest on Capital = (5,76,000 x 6% x 1/12) + (6,96,000 x

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

Total 1,72,000 1,72,000

Class XII www.vedantu.com TS Grewal Solutions

Please find below the transactions under profit and loss

Please find below the transactions under partner’s capital account:

Class XII www.vedantu.com TS Grewal Solutions

Profit and Loss Appropriation A/c

Class XII www.vedantu.com TS Grewal Solutions

Please find below partner’s capital accounts:

Class XII www.vedantu.com TS Grewal Solutions

Class XII www.vedantu.com TS Grewal Solutions

FREE LIVE ONLINE

FREE MASTER CLASS SERIES

You might also like