Here are the fundamentals of partnership TS Grewal solutions 2024-25. You can click on the table of contents any solution you want to see. If you have any doubts, you can ask that in the comment section.
Topics Discussed
Solution 1 (In the absence of Partnership)
- a) not allowed
- b) not allowed
- c) allowed at 6%
- d) equally
- e) not charged
- f) not charged
Solution 2 (Mahesh, Ramesh, and Suresh)
- a) not allowed
- b) not allowed
- c) not charged
- d) to be distributed equally
Solution 3 (Following differences have arisen)
- a) P must give to the firm
- b) Firm will not born. Q to bear personally.
- c) Goods can be purchased from Star Ltd. We have not learned any such rule.
- d) W cannot be admitted
- e) Interest at 6%
Solution 4 (Barun, Tarun, and Shivam)
- a) Not allowed
- b) Not allowed
- c) Not charged
- d) Not charged
Solution 5 (Harshad and Dhiman)
Calculation of Interest on Harshad’s Loan:
Amount of Loan = Rs. 1,00,000
Interest Rate = 6% per annum
Date of Loan = 1 Oct. 2023
Period for Interest (Months) = 6
Interest Amount = 1,00,000*6/100*6/12 = Rs. 3,000
Calculation of profit transferred to P & L Appropriation A/c:
Net Profit before Interest on Loan = Rs. 1,80,000 (given)
Less: Interest to Harshad on Loan = (3,000)
Balance transferred to P & L Appropriation A/c = Rs. 1,77,000
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Profit Transferred to: Harshad’s Capital A/c: 88,500 Dhiman’s Capital A/c: 88,500 | 1,77,000 | Net Profit (After interest on loan for 6 months) | 1,77,000 |
| Total | 1,77,000 | 1,77,000 |
Notes:
Harshad Claims: i) No interest on capital allowed and Interest on loan will be allowed at the rate of 6%.
iii) Profit should be distributed equally.
Dhiman Claims: i) Correct
ii) No remuneration allowed
iii) No interest on capital allowed and interest on loan will be allowed at the rate of 6%.
Solution 6 (X and Y are Partners)
Calculation of Interest on Loan:
| Partner | Amount (Rs.) | Date | Period (Months) | Interest @ 6% |
| X | 80,000 | 1 October 2023 | 6 | 2,400 |
| Y | 40,000 | 1 October 2023 | 6 | 1,200 |
Total Interest on Loan = Rs. 3,600
| Case | Profit/Loss Before Interest | Interest | Profit/Loss After Interest | Share of Profits X(2/5) | Share of Profits Y(3/5) |
| 1 | 21,000 | 3,600 | 17,400 | 6,960 | 10,440 |
| 2 | 3,000 | 3,600 | (600) | (240) | (360) |
| 3 | 5,000 | 3,600 | 1,400 | 540 | 840 |
| 4 | (1,400) | 3,600 | (5,000) | (2,000) | (3,000) |
Solution 7 (Seeta and Geeta are partners)
Total Loan = Rs. 30,000
| Loans | Profit Ratio | Loan Amount | Months | Interest @ 6% |
| Loan by Sita | 3 | 18,000 | 6 | 540 |
| Loan by Geeta | 2 | 12,000 | 6 | 360 |
Note: The loan is given on 1 October 2023 so the interest is payable for 6 months only.
Solution 8 (Bat and Ball are partners)
Calculation of Interest on Loan:
| Partner | Amount | Date | Period (Months) | Interest @ 6% |
| Bat | 2,40,000 | 1 October 2023 | 6 | 7,200 |
| Ball | 1,20,000 | 1 October 2023 | 6 | 3,600 |
Total Interest on Loan = Rs. 10,800
Loss before interest and rent = 9,000
Add: Interest on Loan =10,800
Rent to Bat = 60,000
Total distributable Loss = Rs. 79,800
Share of Bat = Rs. 31,920
Share of Ball = Rs. 47,880
Solution 9 (Akhil, Sunil, and Parvesh)
Calculation of Interest on Loan:
| Partner | Interest | Amount | Date | Period (Months) | Interest @ 10% |
| Sunil | Interest Paid | 3,00,000 | 28 February 2023 | 11 | 27,500 |
| Sunil | Outstanding Interest | 3,00,000 | 1 March 2023 | 1 | 2,500 |
Total Interest = Rs. 30,000
Journal Entries for Interest on Loan:
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
| No entry is to be made for giving a loan as the question has entries only for interest on the loan. | ||||
| 1/3/24 | Interest on Loan by Partner A/c Dr. To Loan by Partner A/c (Being Interest Due on Partner’s Loan) | 27,500 | 27,500 | |
| 1/3/24 | Loan by Partner A/c Dr. To Bank A/c (Being interest paid to partner through cheque) | 27,500 | 27,500 | |
| 31/3/24 | Interest on Loan by Partner A/c Dr. To Loan by Partner A/c (Being interest due on partner’s loan) | 2,500 | 2,500 | |
| 31/3/24 | Profit and Loss A/c Dr. To Interest on Loan by Partner A/c (Being interest on partner’s loan transferred to Profit and Loss A/c) | 30,000 | 30,000 |
Solution 10 (Akhil and Bimal are partners)
Calculation of Interest on Loan:
| Partner | Amount | Date | Period (Months) | Interest |
| Loan by Akhil to Firm | 1,00,000 | 1 January 2024 | 3 | 1,500 |
| Loan by Firm to Bimal | 1,00,000 | 1 January 2024 | 6 | 0 |
Total Interest on Loan = Rs. 1,500
Profit before the above adjustments = Rs. 1,03,000
Less: Interest on Loan by Akhil = (1,500)
Rent to Akhil = (60,000)
Total Distributable Profit = Rs. 41,500
Share of Akhil = Rs. 24,900
Share of Bimal = Rs. 16,600
Solution 11 (Nirmal and Pawan)
Calculation of Interest on Loan:
| Partner | Amount | Date | Period (Months) | Interest Rate | Interest |
| Loan by Firm to Pawan | 5,00,000 | 1 April 2023 | 12 | 10% | 50,000 |
| Loan by Nirmal to Firm | 2,00,000 | 1 December 2023 | 4 | 6% | 4,000 |
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Net Loss (Before Adjustments) | 10,000 | Interset on Loan to Pawan | 50,000 |
| Interest on Loan from Nirmal | 4,000 | ||
| Net Loss transferred to P & L Appropriation A/c | 36,000 | ||
| Total | 50,000 | 50,000 |
You can also solve this question as follows:
Loss before above adjustments = Rs. 10,000
Add: Interest on Loan to Pawan = 50,000
Less: Interest on Loan from Nirmal = 4,000
Total Distributable Profit (Transferred to P & L Appropriation A/c) = Rs. 36,000
Solution 12 (Ankit, Bhanu, and Charu)
Calculation of Interest on Loan:
| Particulars | Amount | Date | Period (Months) | Interest Rate | Interest |
| Loan by Ankit to Firm | 2,50,000 | 1 October 2023 | 6 | 6% | 7,500 |
| Loan by Bhanu to Firm | 2,50,000 | 1 October 2023 | 6 | 6% | 7,500 |
| Loan by Firm to Charu | 1,00,000 | 1 October 2023 | 6 | 6% | 3,000 |
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
| 1/10/23 | Bank A/c Dr. To Loan by Ankit A/c To Loan by Bhanu A/c (Loan taken by the firm from partners) | 5,00,000 | 2,50,000 2,50,000 | |
| 1/10/23 | Loan to Charu A/c Dr. To Bank A/c (Loan given to Charu by Firm) | 1,00,000 | 1,00,000 | |
| 31/3/24 | Interest on Loan by Ankit A/c Dr. To Loan by Ankit A/c (Being Interest Due) | 7,500 | 7,500 | |
| 31/3/24 | Interest on Loan by Bhanu A/c Dr. To Loan by Bhanu A/c (Being Interest Due) | 7,500 | 7,500 | |
| 31/3/24 | Profit & Loss A/c Dr. To Interest on Loan by Ankit A/c To Interest on Loan by Bhanu A/c (Interest transferred to Profit & Loss A/c) | 15,000 | 7,500 7,500 | |
| 31/3/24 | Charu’s Capital A/c Dr. To Interest on Loan to Charu A/c | 3,000 | 3,000 | |
| 31/3/24 | Interest on Loan to Charu A/c Dr. To Profit & Loss A/c | 3,000 | 3,000 |
Solution 13 (Atul, Jetha, and Tarak)
Calculation of Interest on Loan:
| Partner | Amount | Date | Period (Months) | Interest Rate | Interest |
| Loan by Firm to Jetha | 6,00,000 | 1 July 2023 | 9 | No Interest in the absence of an agreement | – |
| Loan by Firm to Jetha | 6,00,000 | 1 July 2023 | 9 | 10% | 45,000 |
Case 1:
Loan to Jetha A/c Dr. 6,00,000
To Bank A/c 6,00,000
(Loan given to Jetha by the Firm)
No Interest will be charged in the absence of agreement.
Case 2:
1/7/23 Loan to Jetha A/c Dr. 6,00,000
To Bank A/c 6,00,000
31/3/24 Jetha’s Capital A/c Dr. 45,000
To Interest on Loan to Jetha 45,000
31/3/24 Interest on Loan to Jetha A/c Dr. 45,000
To Profit & Loss A/c 45,000
Solution 14 (Parul, Paresh, and Rahul)
Calculation of Interest on Loan:
| Particulars | Amount | Date | Period (Months) | Interest Rate | Interest |
| Loan by Firm to Rahul | 6,00,000 | 1 February 2024 | 1 | 6% | 3,000 |
| Loan by Firm to Rahul | 6,00,000 | 1 March 2023 | 1 | 6% | 3,000 |
Journal Entries for Interest on Loan:
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
| No entry is to be made for giving a loan as the question has asked for entries only for interest on loan | ||||
| 5/3/23 | Rahul’s Capital A/c Dr. To Interest on Loan to Rahul A/c | 3,000 | 3,000 | |
| 5/3/23 | Bank A/c Dr. To Rahul’s Capital A/c | 3,000 | 3,000 | |
| 31/3/23 | Rahul’s Capital A/c Dr. To Interest on Loan to Rahul A/c | 3,000 | 3,000 | |
| 31/3/23 | Interest on Loan to Rahul A/c Dr. To Profit and Loss A/c | 6,000 | 6,000 | |
| 5/4/24 | Bank A/c Dr. To Rahul’s Capital A/c | 6,000 | 6,000 |
Solution 15 (Vinod and Mohan)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c Vinod: 6,000 Mohan: 3,600 | 9,600 | Net Profit | 80,000 |
| Vinod’s Salary A/c | 36,000 | ||
| Profit transferred to: Vinod’s Capital A/c: 17,200 Mohan’s Capital A/c: 17,200 | 34,400 | ||
| Total | 80,000 | 80,000 |
Working Note: Since the profit-sharing ratio is not given so we have assumed it to be equal.
Solution 16 (X, Y, and Z)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: X: 50,000 Y: 50,000 Z: 25,000 | 1,25,000 | Net Profit (Before Z’s Salary) | 4,24,000 |
| Z’s Salary A/c | 24,000 | ||
| Profit Transferred to: X’s Current A/c: 1,10,000 Y’s Current A/c: 1,10,000 Z’s Current A/c: 55,000 | 2,75,000 | ||
| Total | 4,24,000 | 4,24,000 |
Solution 17 (X and Y)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: X: 40,000 Y: 30,000 | 70,000 | Net Profit* (Working Note 1) | 2,85,000 |
| Y’s Salary A/c | 60,000 | ||
| Profit Transferred to: X’s Capital A/c: 93,000 Y’s Capital A/c: 62,000 | 1,55,000 | ||
| Total | 2,85,000 | 2,85,000 |
Working Note:
Net profit = Rs. 2,40,000
Add: Y’s Salary = 60,000
Net Profit before Y’s Salary = 3,00,000
Less: Provision for Manager’s Commission (5%) = (15,000)
Net Profit transferred to P & L Appropriation A/c = Rs. 2,85,000
Solution 18 (Atul and Mithun)
Profits before any adjustment = Rs. 2,28,000
Less: Interest on Loan from Atul @ 8% = (24,000)
Add: Interest on Loan to Mithun @ 8% = 16,000
Profit transferred to P & L Appropriation A/c = Rs. 2,20,000
Alternatively, one can prepare profit and loss A/c for the above adjustment for more clarity.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Atul: 50,000 Mithun: 60,000 | 1,10,000 | Net Profit | 2,20,000 |
| Profit transferred to: Atul’s Current A/c: 72,000 Mithun’s Current A/c: 48,000 | 1,20,000 | Interest on Drawings A/c: Atul: 5,000 Mithun: 5,000 | 10,000 |
| Total | 2,30,000 | 2,30,000 |
Note: Share of profit transferred to current A/c as capital A/cs are maintained on a fixed basis.
Solution 19 (Reema and Seema)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Net Loss | 1,00,000 | Interest on Drawings A/c: Reema: 3,000 Seema: 3,000 | 6,000 |
| Net Loss transferred to: Reema: 47,000 Seema: 47,000 | 94,000 | ||
| Total | 1,00,000 | 1,00,000 |
Note: No interest on capital and salary is provided as the firm has incurred a loss.
Solution 20 (Bhanu and Partap)
Profit before any adjustment = Rs. 1,20,000
Less: Interest on Capital to Bhanu = (80,000)
Less: Interest on Capital to Pratap = (1,00,000)
Loss transferred to P & L Appropriation A/c = (60,000)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Net Loss | 60,000 | Interest on Drawings A/c: Bhanu (6 months): 3,750 Pratap (6 months): 7,500 | 11,250 |
| Net Loss transferred to: Bhanu’s Current A/c: 24,375 Pratap’s Current A/c: 24,375 | 48,750 | ||
| Total | 60,000 | 60,000 |
Note: Interest on drawings is charged for 6 months assuming that the drawings are made in the middle of each month. Share of loss transferred to current A/c as capital A/cs are maintained on a fixed basis.
Solution 21 (Amit and Sumit)
Interest on Capital A/c Dr. 40,000
To Amit’s Current A/c 15,000
To Sumit’s Current A/c 25,000
Profit & Loss Appropriation A/c Dr. 40,000
To Interest on Capital A/c 40,000
Alternatively, a combined single entry can also be passed:
Profit & Loss Appropriation A/c Dr. 40,000
To Amit’s Current A/c 15,000
To Sumit’s Current A/c 25,000
Working Note: Interest on Capital is always paid on opening capital:
| Particulars | Amit | Sumit |
| Opening Capital | 1,50,000 | 2,50,000 |
| Interest Rate | 10% | 10% |
| Interest | 15,000 | 25,000 |
Solution 22 (Kamal and Kapil)
Calculation of Interest on Capital:
Interest on capital will be calculated only for the period funds are actually used.
Kamal’s Interest on Capital:
| Date | Amount | Period | Rate | Interest |
| 1/04/23 | 5,00,000 | 9 | 10% | 37,500 |
| 1/01/24 | 6,00,000 | 3 | 10% | 15,000 |
Kapil’s Interest on Capital:
| Date | Amount | Period | Rate | Interest |
| 1/04/23 | 5,00,000 | 9 | 10% | 37,500 |
| 1/01/24 | 4,00,000 | 3 | 10% | 10,000 |
Interest on Capital A/c Dr. 1,00,000
To Kamal’s Current A/c 52,500
To Kapil’s Current A/c 47,500
Profit & Loss Appropriation A/c Dr. 1,00,000
To Interest on Capital A/c 1,00,000
Alternatively, a combined single entry can be passed:
Profit & Loss Appropriation A/c Dr. 1,00,000
To kamal’s Current A/c 52,500
To Kapil’s Current A/c 47,500
| Particular | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Kamal: 52,500 Kapil: 47,500 | 1,00,000 | Net Profit | 6,00,000 |
| Profit transferred to: Kamal’s Current A/c: 2,50,000 Kapil’s Current A/c: 2,50,000 | 5,00,000 | ||
| Total | 6,00,000 | 6,00,000 |
Note: In the absence of information, the profit-sharing ratio is assumed to be equal. Interest on capital and profit will be transferred to the partner’s current A/d as the fixed capital system is followed.
Solution 23 (Simran and Reema)
Interest on Capital A/c Dr. 20,000
To Simran’s Current A/c 10,000
To Reema’s Current A/c 10,000
Profit & Loss Appropriation A/c Dr. 20,000
To Interest on Capital A/c 20,000
Profit & Loss Appropriation A/c Dr. 2,80,000
To Simran’s Current A/c 1,68,000
To Reema’s Current A/c 1,12,000
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Simran: 10,000 Reema: 10,000 | 20,000 | Net Profit | 3,00,000 |
| Profit Transferred to: Simran’s Current A/c: 1,68,000 Reema’s Current A/c: 1,12,000 | 2,80,000 | ||
| Total | 3,00,000 | 3,00,000 |
Note: Interest on capital and profit will be transferred to the partner’s current A/c as the fixed capital system is followed.
Solution 24 (Anita and Ankita)
| Particulars | Anita | Ankita |
| Capital as at 1 April 2023 (Opening) | 5,00,000 | 4,00,000 |
| Interest @ 10% | 50,000 | 40,000 |
Interest on Capital A/c Dr. 90,000
To Anita’s Current A/c 50,000
To Ankita’s Current A/c 40,000
Profit & Loss Appropriation A/c Dr. 90,000
To Interest on Capital A/c 90,000
Note: The capital balance as of 1 April 2023 is given in the question which is the opening capital balance.
Solution 25 (Ashish and Aakash)
First, we need to calculate opening capital as closing capital after the drawings are given in the question. Please note that here only drawings are adjusted in closing capital as per the question.
| Particulars | Ashish | Aakash |
| Capital as on 31 March 2024 (Closing) | 5,00,000 | 6,00,000 |
| Add: Drawings | 1,50,000 | 1,00,000 |
| Opening Capital | 6,50,000 | 7,00,000 |
| Interest on Capital @ 10% | 65,000 | 70,000 |
Interest on Capital A/c Dr. 1,35,000
To Ashish’s Current A/c 65,000
To Aakash’s Current A/c 70,000
Profit & Loss Appropriation A/c Dr. 1,35,000
To Interest on Capital A/c 1,35,000
Alternatively, one single entry can be passed.
Note: The capital given in the question is only after drawings. Interest on capital and profits are not yet adjusted as per language.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Ashish: 65,000 Aakash: 70,000 | 1,35,000 | Net Profit | 5,00,000 |
| Profit transferred to: Ashish’s Current A/c: 2,19,000 Aakash’s Current A/c: 1,46,000 | 3,65,000 | ||
| Total | 5,00,000 | 5,00,000 |
Solution 26 (Naresh and Sukesh)
In this question, nothing is mentioned about whether the fixed or fluctuating method is followed. In the absence of instructions, the fluctuating method is considered.
Calculation of Opening Capital:
| Particulars | Naresh | Sukesh |
| Closing Balance of Capitals | 3,00,000 | 3,00,000 |
| Add: Drawings against capital | 50,000 | – |
| Add: Drawings against profits | 1,00,000 | 1,00,000 |
| Opening Capital | 4,50,000 | 4,50,000 |
Calculation of Interest on Capital:
Naresh:
| Date | Amount | Period (Months) | Rate | Interest |
| 1 April 2023 | 4,50,000 | 6 | 10% | 22,500 |
| 1 October | 4,50,000 | 6 | 10% | 20,000 |
Total Interest on Capital of Naresh = 42,500
Sukesh’s Interest on Capital = 4,00,000*10/100*12/12
= Rs. 40,000
Journal Entries:
Interest on Capital A/c Dr. 82,500
To Naresh’s Capital A/c 42,500
To Sukesh’s Capital A/c 40,000
Profit & Loss Appropriation A/c Dr. 82,500
To Interest on Capital A/c 82,500
Profit & Loss Appropriation A/c Dr. 1,17,500
To Naresh’s Capital A/c 58,750
To Sukesh’s Capital A/c 58,750
Concept: Fixed or fluctuating capital method decides where you write the transactions. Under the fixed capital method opening capital, any additional capital, and drawings against capital are written on capital A/c. All the rest of the transactions are written in the current account.
But if the fluctuating capital method is followed then all transactions are written in the capital account.
Note: Partners profit sharing ratio is assumed to be equal.
Drawings against capital and drawings against profits decide on which amount the interest on capital is paid. So while calculating interest on capital drawings against capital are subtracted but drawings against profit are not subtracted.
Note: 1) Since nothing is written so we assume that they are following the fluctuating capital method.
2) For Sukesh, since the nature of the drawings is not mentioned, we assume them as drawings against capital.
Solution 27 (On 1st April, 2013)
In this question, the total interest on capital is greater than the available profits so profits are distributed in the ratio of interest on capital.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Jay: 4,800 Vijay: 3,000 | 7,800 | Net Profits | 7,800 |
| Total | 7,800 | 7,800 |
Working Note: Calculation of Interest on Capital
| Particulars | Jay | Vijay |
| Capital | 80,000 | 50,000 |
| Interest @ 9% | 7,200 | 4,500 |
Total Interest on Capital = Rs. 11,700
Profit for the year = Rs. 7,800
Here the profits for the year are less than the total appropriations (i.e. interest on capital). So profit will be distributed in the ratio of total appropriations and not in profit.
Calculation of the ratio of total appropriations:
| Particulars | Jay | Vijay |
| Total Interest on Capital | 7,200 | 4,500 |
| Ratio | 8 | 5 |
| Distribution of Profits | 4,800 | 3,000 |
Solution 28 (A and B)
Calculation of Opening Capital:
| Particulars | A | B |
| Closing balance of Capitals | 1,60,000 | 1,40,000 |
| Add: Drawings | 30,000 | 30,000 |
| Less: Profit Share | (37,800) | (25,200) |
| Opening Capital (With Interest) | 1,52,200 | 1,44,800 |
| Opening Capital (Without Interest) | 1,52,200*100/110 = 1,38,363 | 1,44,800*100/110 = 1,31,636 |
Calculation of Profit Share:
Total Opening Capital (including interest and profit Share) = Rs. 3,60,000
Less: Profit during the year (including interest) = (90,000)
Total Opening Capital (excluding interest and profit share) = Rs. 2,70,000
Total Interest on Capital @ 10% = Rs. 27,000
Now
Total Profits during the year = Rs. 90,000
Less: Interest on Capital = (27,000)
Divisible Profits = Rs. 63,000
A’s Share = Rs. 37,800
B’s Share = Rs. 25,200
Calculation of Interest on Capital:
Let the opening capital be Rs. 100
then, interest on capital will be Rs. 10
then, opening capital before interest will be Rs. 110
Now, if the opening capital with interest is Rs. 110, then the opening capital without interest is Rs. 100. If it is Rs. 1 then the opening capital without interest is Rs. 100/110.
If it is Rs. x then opening capital without interest is 100/110*x.
Solution 29 (Following is the extract)
In this question, a lot of information is given which is not relevant. When we see the balance sheet, it shows that the fixed capital method is followed. Drawings and profit shares would have gone to the current account.
So, ignore everything else and simply calculate interest on capital at the given rate as follows:
| Particulars | Neelkan | Mahadev |
| Capital Balance | 10,00,000 | 10,00,000 |
| Interest @ 5% | 50,000 | 50,000 |
Solution 30 (From the following)
The balance sheet in the question shows that a fluctuating method is followed. Here is the calculation of Interest on Capital:
| Particulars | Long | Short |
| Closing Balance of Capitals | 1,20,000 | 1,40,000 |
| Add: Drawings | 40,000 | 50,000 |
| Less: Share of Profit | (25,000) | (25,000) |
| Opening Balance | 1,35,000 | 1,65,000 |
| Interest on Capital @ 8% | 10,800 | 13,200 |
Solution 31 (Amit and Bramit)
Amit:
| Date | Amount | Period | Rate | Interest |
| 1 April 2023 | 15,00,000 | 6 | 8% | 60,000 |
| 1 October 2023 | 12,00,000 | 6 | 8% | 48,000 |
Bramit:
| Date | Amount | Period | Rate | Interest |
| 1 April 2023 | 9,00,000 | 6 | 8% | 36,000 |
| 1 October 2023 | 12,00,000 | 6 | 8% | 48,000 |
Solution 32 (Moli and Bholi)
i) Calculation of Interest on Capital:
| Particulars | Moli | Bholi | Total |
| Capital | 20,000 | 10,000 | |
| Interest @ 6% | 1,200 | 600 | 1,800 |
| Ratio | 2 | 1 | 3 |
| Interest in Capital Provided | 1,000 | 500 |
In this case, total Interest is more than the available profits so profits distributed in the ratio of interest on capital Rs. 1,500 distributed in the ratio of 2:1.
ii) Total Profits available = 1,500
Less: Interest on capital as a charge = (1,800)
Balance Loss = Rs. 300
| Particulars | Moli | Bholi |
| Interest on Capital | 1,000 | 500 |
| Less: Share in Loss (2:3) | (120) | (180) |
Solution 33 (Shiv, Mohan, and Gopal)
Net Profit for the Year = Rs. 1,10,000
Commission @ 10% = Rs. 11,000
Solution 34 (Abha, Bobby, and Vineet)
Net Profit before charging commission = Rs. 2,20,000
Commission @ 10% after charging commission = 2,20,000*10/110 = Rs. 20,000
Solution 35 (A, B, C, and D)
Net profit before charging commission = Rs. 1,80,000
Commission @ 20% after charging commission = Rs. 30,000
(1,80,000*20/120)
The above commission will be shared between the partners in the given ratio:
| A | 2 | 6,000 |
| B | 3 | 9,000 |
| C | 2 | 6,000 |
| D | 3 | 9,000 |
Solution 36 (X and Y)
Net profit before charging commission = Rs. 4,20,000
Salary to X = Rs. 1,20,000
Salary to Y = Rs. 25,000
Net Profit after salary before commission = Rs. 2,75,000
Commission to X @ 10% = Rs. 27,500
Net Profit after salary, after X’s Commission = Rs. 2,47,500
Y’s Commission @ 10% = Rs. 22,500
(2,47,500*10/110)
Balance Profit = Rs. 2,25,000
X’s share = Rs. 1,12,500
Y’s share = Rs. 1,12,500
Note: Profit sharing ratio is assumed to be equal.
Solution 37 (Ram and Mohan)
| Particulars | Ram | Mohan |
| Amount of Drawings | 1,20,000 | 80,000 |
| Rate of Interest | 6% | 6% |
| Period of Interest (Months) | 6 | 6 |
| Interest Amount | 3,600 | 2,400 |
Solution 38 (Brij and Mohan)
| Particulars | Brij | Mohan |
| Amount of Drawings | 48,000 | 36,000 |
| Rate of Interest | 10% | 10% |
| Period of Interest (Months) | 6 | 6 |
| Interest Amount | 2,400 | 1,800 |
Solution 39 (Dev withdrew)
Dev drawings every month = Rs. 10,000
Number of months = 12
Total Drawings = Rs. 1,20,000
Rate of Interest = 12%
Period of Interest (Months) = 6
Interest Amount = Rs. 7,200
Solution 40 (One of the partners)
Partner drawings every quarter = Rs. 9,000
Number of quarters = 4
Total Drawings = Rs. 36,000
Rate of Interest = 6%
Period of Interest (Months) = 4.5 (9+0/2)
Interest Amount = Rs. 810
Solution 41 (A and B)
A’s drawings every month = Rs. 4,000
Number of months = 6
Total Drawings = 24,000
Rate of Interest = 5%
Period of Interest (Months) = 3.5 (6+1/2)
Interest Amount = Rs. 350
Note: Interest is to be calculated only for 6 months.
Solution 42 (A and B)
A’s drawings every month = Rs. 4,000
Number of months = 6
Total Drawings = Rs. 24,000
Rate of Interest = 5%
Period of Interest (Months) = 2.5 (5+0/2)
Interest Amount = Rs. 250
Note: Interest is to be calculated only for 6 months.
Solution 43 (B and C)
C’s drawings every month = Rs. 5,000
Number of months = 6
Total Drawings = 30,000
Rate of Interest = 12%
Period of Interest (Months) = 9.5 (12+7/2)
Interest Amount = Rs. 2,850
Note: Interest is to be calculated only for 12 months.
Solution 44 (Calculate interest on drawings)
| Particulars | Beginning | End | Middle |
| Partner drawings every quarter | 7,500 | 7,500 | 7,500 |
| Number of quarters | 4 | 4 | 4 |
| Total Drawings | 30,000 | 30,000 | 30,000 |
| Rate of Interest | 10% | 10% | 10% |
| Period of Interest (Months) | 7.5 (12+3/2) | 4.5 (9+0/2) | 6 (10.5+1.5/2) |
| Interest Amount | 1,875 | 1,125 | 1,500 |
Solution 45 (The capital accounts)
Calculation of Interest on Capital:
| Particulars | Tisha | Divya |
| Closing Balance | 10,00,000 | 7,50,000 |
| Add: Drawings | 1,00,000 | 50,000 |
| Less: Share of Profit | (2,50,000) | (2,50,000) |
| Opening Balance | 8,50,000 | 5,50,000 |
| Interest on Capital @ 10% | 85,000 | 55,000 |
Calculation of Interest on Drawings:
Tisha’s Interest in Drawings:
Partner’s drawings every quarter = Rs. 25,000
Number of Quarters = 4
Total Drawings = Rs. 1,00,000
Rate of Interest = 6%
Period of Interest (Months) = 4.5 (9+0/2)
Tisha’s interest on drawings = Rs. 2,250
Divya’s Interest on Drawings:
| Date of Drawings | Amount | Period of Interest (Months) | Interest |
| 31 May 2023 | 20,000 | 10 | 1,000 |
| 1 November 2023 | 17,500 | 5 | 437.5 |
| 1 February 2024 | 12,500 | 2 | 125 |
Divya’s Interest on Drawings = Rs. 1,562.5
Solution 46 (A, B, and C)
| Particulars | A | B | C |
| Drawings every month | 10,000 | 10,000 | 10,000 |
| Number of months | 6 | 6 | 6 |
| Total drawings | 60,000 | 60,000 | 60,000 |
| Rate of Interest | 6% | 6% | 6% |
| Period of interest (months) | 9.5 (12+7/2) | 9 (11.5+6.5/2) | 8.5 (11+6/2) |
| Interest Amount | 2,850 | 2,700 | 2,550 |
Note: Interest is to be calculated only for 12 months.
Solution 47 (Calculate the amount)
i) Let the total drawings during the year be x
Rate of Interest = 10% p.a.
Number of months for interest = 6.5 months (12+1/2)
Amount of Interest = Rs. 1,950 (Given)
Calculation: x*10/100*6.5/12 = 1,950
Now, we have to solve it for x
x = 1,950*12/100*6.5/10
x = Rs. 36,000
Total drawings during the year = Rs. 36,000
Monthly drawings will be = Rs. 3,000
ii) Let the total drawings during the year be x.
Rate of interest = 10% p.a.
Number of months for interest = 6 months (11.5+0.5/2)
Amount of Interest = Rs. 2,400 (given)
Calculation: x*10/100*6/12 = Rs. 2,400
x = Rs. 48,000
Total drawings during the year = Rs. 48,000
Monthly drawings will be Rs. 4,000.
iii) Let the drawings during the year be x.
Rate of interest = 10% p.a.
Number of months for interest = 5.5 months (11+0/2)
Amount of Interest (given) = Rs. 2,750
Calculation: x*10/100*5.5/12 = 2,750
x = Rs. 60,000
Total drawings during the year = Rs. 60,000
Monthly drawings will be Rs. 5,000.
Solution 48 (Calculate the amount)
i) Let the total drawings during the year be x.
Rate of interest = 12% p.a.
Number of months for interest = 7.5 months (12+3/2)
Amount of Interest = Rs. 1,500 (given)
Calculation: x*12/100*7.5/12 = 1,500
x = Rs. 20,000
Total drawings during the year = Rs. 20,000
Quarterly drawings will be = Rs. 5,000
ii) Let the total drawings during the year be x.
Rate of interest = 12% p.a.
Number of months for interest = 6 months (10.5+1.5/2)
Amount of Interest = Rs. 1,200 (given)
Calculation: x*12/100*6/12 = 1,200
x = Rs. 20,000
Total drawings during the year = Rs. 20,000
Quarterly drawings will be Rs. 5,000
iii) Let the total drawings during the year be x.
Rate of Interest = 12% p.a.
Number of months for interest = 4.5 months (9+0)/2
Amount of Interest = Rs. 900 (given)
Calculation: x*12/100*4.5/12 = 900
x = Rs. 20,000
Total drawings during the year = Rs. 20,000
Quarterly drawings will be Rs. 5,000.
Solution 49 (Piyush, Harmesh, and Atul)
| Particulars | Piyush | Harmesh | Atul |
| Drawings every month | 20,000 | 20,000 | 20,000 |
| Number of months | 12 | 12 | 12 |
| Total Drawings | 2,40,000 | 2,40,000 | 2,40,000 |
| Rate of Interest | x | x | x |
| Period of Interest (Months) | 6.5 (12+1/2) | 6 (11.5+0.5/2) | 5.5 (11+0/2) |
| Interest Amount | 15,600 | 14,400 | 13,200 |
Note: Interest is to be calculated only for 12 months.
x = 12
Solution 50 (Calculate the rate of interest)
| Particulars | Case 1 | Case 2 | Case 3 |
| Drawings every month | 6,000 | 6,000 | 6,000 |
| Number of quarters | 4 | 4 | 4 |
| Total Drawings | 24,000 | 24,000 | 24,000 |
| Period of Interest (Months) | 7.5 (12+3/2) | 4.5 (9+0/2) | 6 (10.5+1.5/2) |
| Rate of Interest | x | x | x |
| Interest Amount | 1,500 | 900 | 1,200 |
Note: Interest is to be calculated only for 12 months.
Value of x = 10
Solution 51 (Amit and Vijay)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Amit: 20,000 Vijay: 15,000 | 35,000 | Net Profit | 2,16,000 |
| Salary to Partner A/c: Amit: 24,000 Vijay: 36,000 | 60,000 | Interest on Drawings A/c: Amit: 2,200 Vijay: 2,500 | 4,700 |
| Profit transferred to: Amit’s Capital A/c: 75,420 Vijay’s Capital A/c: 50,280 | 1,25,700 | ||
| Total | 2,20,700 | 2,20,700 |
Solution 52 (A and B)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: A: 30,000 B: 18,000 | 48,000 | Net Profit | 5,00,000 |
| Commission to Partner’s A/c: A: 60,000 B: 15,810 | 75,810 | ||
| B’s Salary A/c | 60,000 | ||
| Profit transferred to: A’s Capital A/c: 2,37,143 B’s Capital A/c: 79,048 | 3,16,190 | ||
| Total | 5,00,000 | 5,00,000 |
| Particulars | A (Rs.) | B (Rs.) | Particulars | A (Rs.) | B (Rs.) |
| Drawings A/c | 80,000 | 60,000 | Balance b/d | 5,00,000 | 3,00,000 |
| Balance c/d | 7,47,143 | 4,12,857 | Interest on Capital A/c | 30,000 | 18,000 |
| Partner’s Salary A/c | – | 60,000 | |||
| P & L Appropriation A/c | 2,37,143 | 79,048 | |||
| Partner’s Commission A/c | 60,000 | 15,810 | |||
| Total | 8,27,142 | 4,72,857 | 8,27,142 | 4,72,857 |
Working Note: Calculation of B’s Commission
Net Profit = Rs. 5,00,000
Less: Interest on Capital = (48,000)
Less: A’s Commission = (60,000)
Less: B’s Salary = (60,000)
Balance = Rs. 3,32,000
B’s commission = 3,32,000*5/105 = Rs. 15,810
Note: It seems that the language of the question is not correct. It should read as ‘profit after appropriations’ and not ‘after all expenses’.
Solution 53 (A, B, and C)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: A: 5,000 B: 5,000 C: 10,000 | 20,000 | Net Profit | 1,72,000 |
| C’s Salary A/c | 12,000 | ||
| Profit transferred to: A’s Current A/c: 50,000 B’s Current A/c: 44,000 C’s Current A/c: 46,000 | 1,40,000 | ||
| Total | 1,72,000 | 1,72,000 |
Working Note: Calculation of Interest on Capital
| Particulars | A (Rs.) | B (Rs.) | C (Rs.) |
| Capital | 50,000 | 50,000 | 1,00,000 |
| Interest @ 10% | 5,000 | 5,000 | 10,000 |
Appropriation of Profits:
| Particulars | A (Rs.) | B (Rs.) | C (Rs.) | Firm (Rs.) |
| First 20,000 in proportion to capitals (1:1:2) | 5,000 | 5,000 | 10,000 | 20,000 |
| Next 30,000 in 5:3:2 | 15,000 | 9,000 | 6,000 | 30,000 |
| Remaining (1:1:1) | 30,000 | 30,000 | 30,000 | 90,000 |
| Total | 50,000 | 44,000 | 46,000 | 1,40,000 |
Journal Entry:
Profit & Loss Appropriation A/c Dr. 1,40,000
To A’s Current A/c 50,000
To B’s Current A/c 44,000
To C’s Current A/c 46,000
Solution 54 (Amit, Binita, and Charu)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Amit: 5,000 Binita: 10,000 Charu: 15,000 | 30,000 | Net Profit | 5,00,000 |
| Amit’s Salary A/c | 1,20,000 | ||
| Binita’s Commission A/c | 23,810 | ||
| General Reserve A/c | 50,000 | ||
| Profit transferred to: A’s Capital A/c: 92,063 B’s Capital A/c: 92,063 C’s Capital A/c: 92,063 | 2,76,190 | ||
| Total | 5,00,000 | 5,00,000 |
| Particulars | Amit (Rs.) | Binita (Rs.) | Charu (Rs.) | Particulars | Amit (Rs.) | Binita (Rs.) | Charu (Rs.) |
| Balance c/d | 3,17,063 | 3,25,873 | 4,07,063 | Balance b/d | 1,00,000 | 2,00,000 | 3,00,000 |
| Interest on Capital A/c | 5,000 | 10,000 | 15,000 | ||||
| Partner’s Salary A/c | 1,20,000 | – | – | ||||
| Partner’s Commission A/c | – | 23,810 | – | ||||
| Profit & Loss Appropriation A/c | 92,063 | 92,063 | 92,063 | ||||
| Total | 3,17,063 | 3,25,873 | 4,07,063 | 3,17,063 | 3,25,873 | 4,07,063 |
Working Note: Calculation of Binita’s Commission
Binita’s Commission = 5,00,000*5/105 = Rs. 23,809.5
Solution 55 (Yadu, Vidu, and Radhu)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Yadu: 54,000 Vidu: 30,000 Radhu: 24,000 | 1,08,000 | Net Profit | 2,53,000 |
| Profit transferred to: Yadu: 61,200 Vidu: 45,900 Radhu: 45,900 | 1,53,000 | Interest on Drawings A/c: Yadu: 3,200 Vidu: 2,800 Radhu: 2,000 | 8,000 |
| Total | 2,61,000 | 2,61,000 |
Note: The profit that is given in the question is already after interest on the loan so no adjustment is required.
Solution 56 (Sajal and kajal)
In this question, in the absence of agreement interest on the loan will be @ 6%.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Sajal: 25,000 Kajal: 20,000 | 45,000 | Net Profit (After interest on loan) | 6,84,600 |
| General Reserve A/c | 64,500 | Interest on Drawings A/c: Sajal: 3,000 kajal: 2,400 | 5,400 |
| Profit transferred to: Sajal’s Capital A/c: 3,87,000 kajal’s Capital A/c: 1,93,500 | 5,80,500 | ||
| Total | 6,90,000 | 6,90,000 |
| Particulars | Sajal (Rs.) | Kajal (Rs.) | Particulars | Sajal (Rs.) | Kajal (Rs.) |
| Drawings A/c | 1,00,000 | 80,000 | Balance b/d | 5,00,000 | 4,00,000 |
| Interest on Drawings A/c | 3,000 | 2,400 | Interest on Capital A/c | 25,000 | 20,000 |
| Balance c/d | 8,09,000 | 5,31,100 | P & L Appropriation A/c | 3,87,000 | 1,93,500 |
| Total | 9,12,000 | 6,13,500 | 9,12,000 | 6,13,500 |
Working Note:
- Interest on Loan by Kajal
Loan Amount = Rs. 3,00,000
Interest @6% = 18,000 - Amount transfer to Reserve
Net Profit = Rs. 7,02,600
Less: Interest on Loan by Kajal = (18,000)
Less: Interest on Capital = (45,000)
Add: Interest on Drawings = 5,4000
Divisible Profits = Rs. 6,45,000
Transfer to Reserves @ 10% = Rs. 64,500 - Where Interest on Loan is transferred
Note that interest on loan is not transferred to capital A/c but it is transferred to partner’s loan A/c.
Solution 57 (Ali and Bahadur)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Ali: 12,500 Bahadur: 10,000 | 22,500 | Net Profit | 4,00,000 |
| Bahadur’s Salary A/c | 30,000 | ||
| General Salary A/c | 34,750 | ||
| Profit transferred to: Ali’s Current A/c: 2,18,925 Bahadur’s Current A/c: 93,825 | 3,12,750 | ||
| Total | 4,00,000 | 4,00,000 |
| Particulars | Ali (Rs.) | Bahadur (Rs.) | Particulars | Ali (Rs.) | Bahadur (Rs.) |
| Drawings A/c | 35,000 | 25,000 | Interest on Capital A/c | 12,500 | 10,000 |
| Balance c/d | 1,96,425 | 1,08,825 | Partner’s Salary A/c | – | 30,000 |
| P & L Appropriation A/c | 2,18,925 | 93,825 | |||
| Total | 2,31,425 | 1,33,825 | 2,31,425 | 1,33,825 |
| Particulars | Ali (Rs.) | Bahadur (Rs.) | Particulars | Ali (Rs.) | Bahadur (Rs.) |
| Balance c/d | 2,50,000 | 2,00,000 | Balance b/d | 2,50,000 | 2,00,000 |
| Total | 2,50,000 | 2,00,000 | 2,50,000 | 2,00,000 |
Working Note: Calculation of Divisible Profits
Net Profits = Rs. 4,00,000
Less: Interest on Capital = (22,500)
Less: Bahadur’s Salary = (30,000)
Divisible Profits = Rs. 3,47,500
General Reserve @ 10% = 34,750
Solution 58 (Kabir, Zoravar, and Parul)
In this question, the appropriations are more than the available profits so the profits are divided in the ratio of appropriations.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Profit transferred to: Kabir: 40,000 Zoravar: 32,000 Parul: 88,000 | 1,60,000 | Net Profit | 1,55,500 |
| Interest on Drawings A/c: Kabir: 1,500 Zoravar: 1,500 Parul: 1,500 | 4,500 | ||
| Total | 1,60,000 | 1,60,000 |
Working Note: Calculation of Total Appropriations
| Particulars | Kabir (Rs.) | Zoravar (Rs.) | Parul (Rs.) | Total (Rs.) |
| Interest on Capital | 26,000 | 16,000 | 10,000 | 52,000 |
| Partner’s Salary | 24,000 | 24,000 | – | 48,000 |
| Partner’s Commission | – | – | 1,00,000 | 1,00,000 |
| Total | 50,000 | 40,000 | 1,10,000 | 2,00,000 |
| Ratio | 5 | 4 | 11 | 20 |
Calculation of Profits available for Appropriation:
Net Profit: 1,55,500
Add: Interest on Drawings = 4,500
Total = Rs. 1,60,000
Note that the total appropriations are greater than the profits available so profits will be distributed in the ratio of appropriation. The divisible profits (Net Profits + Interest on Drawings – Appropriations) are negative so no amount is transferred to the reserve.
Solution 59 (X and Y)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: X: 24,000 Y: 18,000 | 42,000 | Profit and Loss A/c (After interest on loan) | 4,59,500 |
| Partner’s Salary A/c: X: 60,000 Y: 90,000 | 1,50,000 | Interest on Drawings A/c: X: 5,000 Y: 6,250 | 11,250 |
| X’s Commission A/c | 17,500 | ||
| General Reserve A/c | 50,000 | ||
| Profit transferred to: X’s Capital A/c: 1,18,125 Y’s Capital A/c: 93,125 | 2,11,250 | ||
| Total | 4,70,750 | 4,70,750 |
| Particulars | X (Rs.) | Y (Rs.) | Particulars | X (Rs.) | Y (Rs.) |
| Drawings A/c | 1,00,000 | 1,25,000 | Balance b/d | 2,00,000 | 1,50,000 |
| Interest on Drawings A/c | 5,000 | 6,250 | Interest on Capital A/c | 24,000 | 18,000 |
| Balance c/d | 3,14,625 | 2,19,875 | Partner’s Salaries A/c | 60,000 | 90,000 |
| P & L Appropriation A/c | 1,18,125 | 93,125 | |||
| Partner’s Commission A/c | 17,500 | – | |||
| Total | 4,19,625 | 3,51,125 | 4,19,625 | 3,51,125 |
Working Note:
Capital Ratio of X and Y = 4:3
| Particulars | X (Rs.) | Y (Rs.) |
| Upto Rs. 1,75,000 | 1,00,000 | 75,000 |
| Above Rs. 1,75,000 | 18,125 | 18,125 |
| Total | 1,18,125 | 93,125 |
Calculation of General Reserve:
Net Profit = Rs. 4,59,500 (After interest on loan)
Less: Interest on Capital = (42,000)
Less: Salary = (1,50,000)
Less: Commission = (17,500)
Balance = Rs. 2,50,000
Reserve @ 20% = Rs. 50,000
Solution 60 (Aditi, Bobby, and Krish)
| Particulars | Aditi (Rs.) | Bobby (Rs.) | Krish (Rs.) |
| Capital | 5,00,000 | 4,00,000 | 2,00,000 |
| Interest on Capital @ 10% | 50,000 | 40,000 | 20,000 |
| Drawings | 60,000 | 50,000 | – |
| Interest on Drawings @ 6% (For 6 Months) | 1,800 | 1,500 | – |
Krish’s Loan = Rs. 40,000
Interest @ 9% = Rs. 2,100 (For 7 Months)
i) Interest on Bobby’s Capital
Interest on Capital A/c Dr. 40,000
To Bobby’s Capital A/c 40,000
P & L Appropriation A/c Dr. 40,000
To Interest on Capital A/c 40,000
ii) Charging interest on Aditi’s Drawings
Aditi’s Capital A/c Dr. 1,800
To Interest on Drawings A/c 1,800
Interest on Drawings A/c Dr. 1,800
To P & L Appropriation A/c 1,800
iii) Interest on loan by Krish
Interest on Loan A/c Dr. 2,100
To Loan from krish A/c 2,100
Profit and Loss A/c Dr. 2,100
To Interest on Loan A/c 2,100
Solution 61 (Reya, Mona, and Nisha)
Total Profits for the last 3 years:
Year 1 = Rs.1,40,000
Year 2 = Rs. 84,000
Year 3 = Rs. 1,06,000
Total = Rs. 3,30,000
| Particulars | Reya (Rs.) | Mona (Rs.) | Nisha (Rs.) |
| Incorrect Distribution of Profits (Equally) | 1,10,000 | 1,10,000 | 1,10,000 |
| Correct Distribution of Profits (3:2:1) | 1,65,000 | 1,10,000 | 55,000 |
| Particulars | Reya (Dr.) | Reya (Cr.) | Mona (Dr.) | Mona (Cr.) | Nisha (Dr.) | Nisha (Cr.) | Firm (Dr.) | Firm (Cr.) |
| Correct Distribution of Profits (3:2:1) | 1,65,000 | 1,10,000 | 55,000 | 3,30,000 | ||||
| Incorrect Distribution of Profits (Equally) | 1,10,000 | 1,10,000 | 1,10,000 | 3,30,000 | ||||
| Total | 1,10,000 | 1,65,000 | 1,10,000 | 1,10,000 | 1,10,000 | 55,000 | 3,30,000 | 3,30,000 |
| Net Effect | 55,000 Cr. | 55,000 Dr. |
Neha’s Capital A/c Dr. 55,000
To Reya’s Capital A/c 55,000
Solution 62 (Azad and Benny)
| Particulars | Azad (Rs.) | Benny (Rs.) | Total (Rs.) |
| Fixed Capital | 40,000 | 80,000 | 1,20,000 |
| Interest @ 5% | 2,000 | 4,000 | 6,000 |
Total Interest on Capital is Rs. 6,000. This was wrongly distributed equally in the profit sharing ratio.
| Particulars | Azad Dr. | Azad Cr. | Benny Dr. | Benny Cr. | Firm Dr. | Firm Cr. |
| Wrong amount distributed, taken back | 3,000 | 3,000 | 6,000 | |||
| Interest on capital | 2,000 | 4,000 | 6,000 | |||
| Total | 3,000 | 2,000 | 3,000 | 4,000 | 6,000 | 6,000 |
| Net Effect | 1,000 Dr. | 1,000 Cr. |
Azad’s Capital A/c Dr. 1,000
To Benny’s Capital A/c 1,000
Solution 63 (Ram, Mohan, and Sohan)
| Particulars | Ram (Rs.) | Mohan (Rs.) | Sohan (Rs.) | Total |
| Capital | 1,20,000 | 90,000 | 60,000 | |
| Interest @ 6% | 7,200 | 5,400 | 3,600 | 16,200 |
| Interest @ 5% | 6,000 | 4,500 | 3,000 | 13,500 |
| Particulars | Ram Dr. | Ram Cr. | Mohan Dr. | Mohan Cr. | Sohan Dr. | Sohan Cr. | Firm Dr. | Firm Cr. |
| Incorrect Interest on Capital | 7,200 | 5,400 | 3,600 | 16,200 | ||||
| Corrrect Interest on Capital | 6,000 | 4,500 | 3,000 | 13,500 | ||||
| Balance Profit distributed in profit sharing ratio | 900 | 900 | 900 | 2,700 | ||||
| Total | 7,200 | 6,900 | 5,400 | 5,400 | 3,600 | 3,900 | 16,200 | 16,200 |
| Net Effect | 300 Dr. | 300 Cr. |
Ram’s Capital A/c Dr. 300
To Sohan’s Capital A/c 300
Note: Total Rs. 16,200 were distributed incorrectly. Out of that, Rs. 13,500 was distributed correctly as interest on capital. The balance Rs. 2,700 is to be distributed in the profit sharing ratio.
Solution 64 (Ram, Shyam, and Mohan)
| Particulars | Ram | Shyam | Mohan | Total |
| Capital | 3,00,000 | 1,00,000 | 2,00,000 | |
| Interest @ 9% | 27,000 | 9,000 | 18,000 | 54,000 |
| Interest @ 10% | 30,000 | 10,000 | 20,000 | 60,000 |
| Particulars | Ram Dr. | Ram Cr. | Shyam Dr. | Shyam Cr. | Mohan Dr. | Mohan Cr. | Firm Dr. | Firm Cr. |
| Incorrect Interest on Capital @ 9% | 27,000 | 9,000 | 18,000 | 54,000 | ||||
| Correct Interest on Capital | 30,000 | 10,000 | 20,000 | 60,000 | ||||
| Excess Profits Distributed (In Profit Sharing Ratio) | 2,400 | 1,200 | 2,400 | 6,000 | ||||
| Total | 29,400 | 30,000 | 10,200 | 10,000 | 20,400 | 20,000 | 60,000 | 60,000 |
| Net Effect | 600 Cr. | 200 Dr. | 400 Dr. |
Shyam’s Current A/c Dr. 200
Mohan’s Current A/c Dr. 400
To Ram’s Current A/c 600
Due to fixed capitals, the entry is to be passed in the current A/c.
Solution 65 (Profit earned by)
Note: In this question, some more amount over and above profits has now come to the firm in the form of interest on drawings.
| Particulars | Pankaj Dr. | Pankaj Cr. | Anu Dr. | Anu Cr. | Firm Dr. | Firm Cr. |
| Interest on Drawings Omitted | 3,000 | 1,000 | 4,000 | |||
| Distribution as Profits (1:1) | 2,000 | 2,000 | 4,000 | |||
| Total | 3,000 | 2,000 | 1,000 | 2,000 | 4,000 | 4,000 |
| Net Effect | 1,000 Dr. | 1,000 Cr. |
Pankaj’s Capital A/c Dr. 1,000
To Anu’s Capital A/c 1,000
Solution 66 (Ram, Mohan, and Sohan)
| Particulars | Ram (Rs.) | Mohan (Rs.) |
| Drawings Per Month | 3,000 | 4,000 |
| Number of Months | 12 | 12 |
| Total Drawings | 36,000 | 48,000 |
| Rate of Interest | 6% | 6% |
| Interest Period (Months) | 6 | 6 |
| Total Interest on Drawings | 1,080 | 1,440 |
So, we took Rs. 2,520 as interest on drawings from partners and later distributed to all in profit sharing ratio.
| Particulars | Ram Dr. | Ram Cr. | Mohan Dr. | Mohan Cr. | Sohan Dr. | Sohan Cr. | Firm Dr. | Firm Cr. |
| Incorrect Interest on Drawings @ 6% | 1,080 | 1,440 | 2,520 | |||||
| Incorrect Distribution of Profits | 1,260 | 630 | 630 | 2,520 | ||||
| Total | 1,260 | 1,080 | 630 | 1,440 | 630 | 0 | 2,520 | 2,520 |
| Net Effect | 180 Dr. | 810 Cr. | 630 Dr. |
Ram’s Capital A/c Dr. 180
Sohan’s Capital A/c Dr. 630
To Mohan’s Capital A/c 810
Solution 67 (Simrat and Bir)
When Capitals are fluctuating:
Calculation of Opening Capital:
| Particulars | Simrat | Bir |
| Closing Balance | 4,80,000 | 6,00,000 |
| Less: Additional Capital | (1,20,000) | (3,00,000) |
| Add: Drawings against Capital | 2,40,000 | 60,000 |
| Add: Drawings against Profit | 1,20,000 | 60,000 |
| Less: Share of Profits (3:2) | 1,44,000 | 96,000 |
| Balance Opening Capital | 5,76,000 | 3,24,000 |
Note: No adjustment for interest on capital is required as it was omitted. This has made the question more simple.
Calculation of Interest on Capital:
Simrat:
| Date | Amount | Period | Rate | Interest |
| 01/04/23 | 5,76,000 | 1 | 6% | 2,880 |
| 01/05/23 | 6,96,000 | 5 | 6% | 2,880 |
| 01/10/23 | 4,56,000 | 6 | 6% | 2,880 |
Bir:
| Date | Amount | Period | Rate | Interest |
| 01/04/23 | 3,24,000 | 1 | 6% | 1,620 |
| 01/05/23 | 2,64,000 | 5 | 6% | 6,600 |
| 01/10/23 | 5,64,000 | 6 | 6% | 16,920 |
Here question has not asked for adjustment entry. It is given here only for knowledge.
| Particulars | Simrat Dr. | Simrat Cr. | Bir Dr. | Bir Cr. | Firm Dr. | Firm Cr. |
| Interest on capital distributed | 33,960 | 25,140 | 59,100 | |||
| Incorrect distribution of profit taken back (3:2) | 35,460 | 23,640 | 59,100 | |||
| Total | 35,460 | 33,960 | 23,640 | 25,140 | 59,100 | 59,100 |
| Net Effect | 1,500 Dr. | 1,500 Cr. |
Simrat’s Capital A/c Dr. 1,500
To Bir’s Capital A/c 1,500
When Capitals are Fixed:
Calculation of Opening Capital:
| Particulars | Simrat | Bir |
| Closing Balance | 4,80,000 | 6,00,000 |
| Less: Additional Capital | 1,20,000 | 3,00,000 |
| Add: Capital Withdrawn | 2,40,000 | 60,000 |
| Balance Opening Capital | 6,00,000 | 3,60,000 |
Simrat:
| Date | Amount | Period | Rate | Interest |
| 1/4/23 | 6,00,000 | 1 | 6% | 3,000 |
| 1/5/23 | 7,20,000 | 5 | 6% | 18,000 |
| 1/10/23 | 4,80,000 | 6 | 6% | 14,400 |
Bir:
| Date | Amount | Period | Rate | Interest |
| 1/4/23 | 3,60,000 | 1 | 6% | 1,800 |
| 1/5/23 | 3,00,000 | 5 | 6% | 7,500 |
| 1/10/23 | 6,00,000 | 6 | 6% | 18,000 |
Here question has not asked for adjustment entry. It is given here only for knowledge.
| Particulars | Simrat Dr. | Simrat Cr. | Bir Dr. | Bir Cr. | Firm Dr. | Firm Cr. |
| Interest on Capital distributed | 35,400 | 27,300 | 62,700 | |||
| Incorrect distribution of profit taken back (3:2) | 37,620 | 25,080 | 62,700 | |||
| Total | 37,620 | 35,400 | 25,080 | 27,300 | 62,700 | 62,700 |
| Net Effect | 2,220 Dr. | 2,220 Cr. |
Simrat’s Capital A/c Dr. 2,220
To Bir’s Capital A/c 2,220
Solution 68 (Mita and Usha)
There are three omissions: a) Interest on Capital
b) Interest on Drawings
c) Commission
Since these items were omitted, the total amount was distributed in the profit sharing ratio incorrectly.
| Particulars | Mita (Rs.) | Usha (Rs.) | Total (Rs.) |
| Opening Capital | 1,40,000 | 1,20,000 | |
| (A) Interest on Capital @ 6% | 8,400 | 7,200 | 15,600 |
| Drawings | 32,000 | 24,000 | |
| (B) Interest on Drawings | 480 | 360 | 840 |
| (C) Mita’s Commission | 8,000 | 8,000 | |
| Net Adjustment Amount (A+B+C) | 22,760 |
| Particulars | Mita Dr. | Mita Cr. | Usha Dr. | Usha Cr. | Firm Dr. | Firm Cr. |
| Interest on Capital | 8,400 | 7,200 | 15,600 | |||
| Interest on Drawings | 480 | 360 | 840 | |||
| Commission | 8,000 | 8,000 | ||||
| Distributed as Profit | 9,104 | 13,656 | 22,760 | |||
| Total | 9,584 | 16,400 | 14,016 | 7,200 | 23,600 | 23,600 |
| Net Effect | 6,816 Cr. | 6,816 Dr. |
Usha’s Capital A/c Dr. 6,816
To Mita’s Capital A/c 6,816
Solution 69 (A, B, and C)
While in other questions the error is only to the extent of appropriations. In this question, total profits are distributed wrongly as it was distributed in capital ratio.
| Particulars | A (Rs.) | B (Rs.) | C (Rs.) |
| Opening Capital | 60,000 | 40,000 | 20,000 |
| Interest on Capital @ 5% | 3,000 | 2,000 | 1,000 |
| Salary to B | 18,000 | ||
| Commission to C @ 5% | 3,700 |
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: A: 3,000 B: 2,000 C: 1,000 | 6,000 | Net Profit | 80,000 |
| B’s Salary A/c | 18,000 | ||
| C’s Commission A/c | 3,700 | ||
| Profit transferred to: A: 20,920 B: 20,920 C: 10,460 | 52,300 | ||
| Total | 80,000 | 80,000 |
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Profit transferred to: (in capital ratio) A: 40,000 B: 26,667 C: 13,333 | 80,000 | Net Profit | 80,000 |
| Total | 80,000 | 80,000 |
| Particulars | A Dr. | A Cr. | B Dr. | B Cr. | C Dr. | C Cr. | Firm Dr. | Firm Cr. |
| Profit taken back | 40,000 | 26,667 | 13,333 | 80,000 | ||||
| Interest on Capital Distributed | 3,000 | 2,000 | 1,000 | 6,000 | ||||
| Salary Distributed | 18,000 | 18,000 | ||||||
| Commission Distributed | 3,700 | 3,700 | ||||||
| Profit Distributed | 20,920 | 20,920 | 10,460 | 52,300 | ||||
| Total | 40,000 | 23,920 | 26,667 | 40,920 | 13,333 | 15,160 | 80,000 | 80,000 |
| Net Effect | 16,080 Dr. | 14,253 Cr. | 1,827 Cr. |
A’s Current A/c Dr. 16,080
To B’s Current A/c 14,253
To C’s Current A/c 1,827
Solution 70 (Pranav, Karan, and Rahim)
| Particulars | Pranav Dr. | Pranav Cr. | Karan Dr. | Karan Cr. | Rahim Dr. | Rahim Cr. | Firm Dr. | Firm Cr. |
| Profit taken back | 39,000 | – | 26,000 | – | 13,000 | – | – | 78,000 |
| Interest on Capital Provided | – | 39,000 | – | 23,400 | – | 15,600 | 78,000 | – |
| Total | 39,000 | 39,000 | 26,000 | 23,400 | 13,000 | 15,600 | 78,000 | 78,000 |
| Net Effect | 2,600 Dr. | 2,600 Cr. |
Working Note:
As interest on capital is @ 10%, it would be 50,000, 30,000, and 20,000 for Pranav, Karan, and Rahim respectively.
Since total appropriations are higher than the available profits:
| Ratio of Appropriations | 5 | 3 | 2 |
| Interest on Capital | 39,000 | 23,400 | 15,600 |
Karan’s Capital A/c Dr. 2,600
To Rahim’s Capital A/c 2,600
Solution 71 (On 31st March, 2024)
Calculation of Opening Capital:
| Particulars | P (Rs.) | Q (Rs.) | R (Rs.) |
| Opening Capital | 40,000 | 30,000 | 20,000 |
| Less: Profits Distributed | (30,000) | (20,000) | (10,000) |
| Add: Drawings | 10,000 | 7,500 | 4,500 |
| Opening Capital | 20,000 | 17,500 | 14,500 |
| Interest on Capital @ 5% | 1,000 | 875 | 725 |
| Incorrect Profit Distribution | 1,300 | 867 | 433 |
| Difference | (300) | 8 | 292 |
| Particulars | P Dr. | P Cr. | Q Dr. | Q Cr. | R Dr. | R Cr. | Firm Dr. | Firm Cr. |
| Profit taken back | 1,300 | 867 | 433 | 2,600 | ||||
| Interest on capital provided | 1,000 | 875 | 725 | 2,600 | ||||
| Total | 1,300 | 1,000 | 867 | 875 | 433 | 725 | 2,600 | 2,600 |
| Net Effect | 300 Dr. | 8 Cr. | 292 Cr. |
P’s Capital A/c Dr. 300
To Q’s Capital A/c 8
To R’s Capital A/c 292
Solution 72 (Mohan, Vijay, and Anil)
Calculation of Opening Capital:
| Particulars | Mohan (Rs.) | Vijay (Rs.) | Anil (Rs.) |
| Closing Capital | 30,000 | 25,000 | 20,000 |
| Less: Profits Distributed | (8,000) | (8,000) | (8,000) |
| Add: Drawings | 5,000 | 4,000 | 3,000 |
| Opening Capital | 27,000 | 21,000 | 15,000 |
| Interest on Capital @ 10% | 2,700 | 2,100 | 1,500 |
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Mohan: 2,700 Vijay: 2,100 Anil: 1,500 | 6,300 | Profit and Loss A/c | 24,000 |
| Profit transferred to: Mohan: 6,100 Vijay: 6,100 Anil: 6,100 | 18,300 | Interest on Drawings A/c: Mohan: 250 Vijay: 200 Anil: 150 | 600 |
| Total | 24,600 | 24,600 |
| Particulars | Mohan Dr. | Mohan Cr. | Vijay Dr. | Vijay Cr. | Anil Dr. | Anil Cr. | Firm Dr. | Firm Cr. |
| Profit takne back | 1,900 | 1,900 | 1,900 | 5,700 | ||||
| Interest on Capital Provided | 2,700 | 2,100 | 1,500 | 6,300 | ||||
| Interest on Drawings | 250 | 200 | 150 | 5,700 | ||||
| Total | 2,150 | 2,700 | 2,100 | 2,100 | 2,050 | 1,500 | 6,300 | 6,300 |
| Net Effect | 550 Cr. | 550 Dr. |
Anil’s Capital A/c Dr. 550
To Mohan’s Capital A/c 550
Solution 73 (Mudit, Sudhir, and Uday)
| Particulars | Mudit (Rs.) | Sudhir (Rs.) | Uday (Rs.) |
| Opening Capital | 4,00,000 | 1,60,000 | 1,20,000 |
| Interest on Capital @ 2.5% | 10,000 | 4,000 | 3,000 |
| Salary | 18,000 | ||
| Commission | 12,000 | ||
| Mudit’s Commission | 3,000 | ||
| Correct Distribution of Profits | 30,000 | 10,000 | 10,000 |
| Incorrect Distribution of Profits | 60,000 | 20,000 | 20,000 |
| Particulars | Mudit Dr. | Mudit Cr. | Sudhir Dr. | Sudhir Cr. | Uday Dr. | Uday Cr. | Firm Dr. | Firm Cr. |
| Profit taken back | 30,000 | 10,000 | 10,000 | 50,000 | ||||
| Interest on Capital Provided | 10,000 | 4,000 | 3,000 | 17,000 | ||||
| Salary Provided | 18,000 | 18,000 | ||||||
| Commission Provided | 3,000 | 12,000 | 15,000 | |||||
| Total | 30,000 | 31,000 | 10,000 | 4,000 | 10,000 | 15,000 | 50,000 | 50,000 |
| Net Effect | 1,000 Cr. | 6,000 Dr. | 5,000 Cr. |
Sudhir’s Current A/c Dr. 6,000
To Mudit’s Current A/c 1,000
To Uday’s Current A/c 5,000
Working Note: Calculation of Mudit’s Commission
Net Profit = 1,00,000
Less: Interest on Capital = (17,000)
Less: Salary = (18000)
Less: Commission to Uday = (12,000)
Divisible Profits before Mudit’s Commission = 53,000
Mudit’s Commission = 53,000*6/106 = Rs. 3,000
Solution 74 (Piya and Bina)
Calculation of Opening Capital:
| Particulars | Piya (Rs.) | Bina (Rs.) |
| Closing Capital | 80,000 | 40,000 |
| Less: Profits | (1,80,000) | (12,000) |
| Add: Drawings | 8,000 | 4,000 |
| Opening Capital | 70,000 | 32,000 |
| Interest on capital @ 12% | 8,400 | 3,840 |
| Salary | 12,000 | – |
| Particulars | Piya Dr. | Piya Cr. | Bina Dr. | Bina Cr. | Firm Dr. | Firm Cr. |
| Interest on Capital Provided | 8,400 | 3,840 | 12,240 | |||
| Salary | 12,000 | 12,000 | ||||
| Profit Taken Back | 14,544 | 9696 | 24,240 | |||
| Total | 14,544 | 20,400 | 9,696 | 3,840 | 24,240 | 24,240 |
| Net Effect | 5,856 Cr. | 5856 Dr. |
Bina’s Capital A/c Dr. 5,856
To Piya’s Capital A/c 5,856
Solution 75 (Naveen, Qadir, and Rajesh)
Calculation of Interest on Capital:
| Particulars | Naveen (Rs.) | Qadir (Rs.) | Rajesh (Rs.) |
| Capital | 4,00,000 | 3,60,000 | 2,40,000 |
| Interest @ 6% | 24,000 | 21,600 | 14,400 |
| Particulars | Naveen Dr. | Naveen Cr. | Qadir Dr. | Qadir Cr. | Rajesh Dr. | Rajesh Cr. | Firm Dr. | Firm Cr. |
| Interest on capital taken back for the year ended 31 March 2017 | 24,000 | 21,600 | 14,400 | 60,000 | ||||
| Salary Provided for the year ended 31 March 2017 | 14,000 | 16,000 | 30,000 | |||||
| Net Amount (31 March 2017) in 3:2:1 | 15,000 | 10,000 | 5,000 | 30,000 | ||||
| Interest on capital taken back (31 March 2018) | 24,000 | 21,600 | 14,400 | 60,000 | ||||
| Salary provided (31 March 2018) | 14,000 | 16,000 | 30,000 | |||||
| Net Amount (31 March 2018) in 5:3:2 | 15,000 | 9,000 | 6,000 | 30,000 | ||||
| Total | 48,000 | 58,000 | 43,200 | 51,000 | 28,800 | 11,000 | 1,20,000 | 1,20,000 |
| Net Effect | 10,000 Cr. | 7,800 Cr. | 17,800 Dr. |
Rajesh’s Current A/c Dr. 17,800
To Naveen’s Current A/c 10,800
To Qadir’s Current A/c 7,800
Solution 76 (Mannu and Shrishti)
Here while calculating opening capital we will not add drawings as it is given separately in the balance sheet and so not yet adjusted in closing capital.
Calculation of Opening Capital:
| Particulars | Mannu | Shrishti | Total |
| Closing Capital | 3,00,000 | 1,00,000 | |
| Less: Profits | (30,000) | (20,000) | |
| Opening Capital | 2,70,000 | 80,000 | |
| Interest on Capital @ 5% | 13,500 | 4,000 | 17,500 |
| Interest on Drawings @ 6% | 1,200 | 600 | 1,800 |
| Correct Profit Distribution | 20,580 | 13,720 | 34,300 |
| Incorrect Profit Distribution (3:2) | 30,000 | 20,000 | 50,000 |
| Particulars | Mannu Dr. | Mannu Cr. | Shrishti Dr. | Shrishti Cr. | Firm Dr. | Firm Cr. |
| Interest on Capital Provided | 13,500 | 4,000 | 17,500 | |||
| Interest on Drawings Charged | 1,200 | 600 | 1,800 | |||
| Profit taken back | 9,420 | 6,280 | 15,700 | |||
| Total | 10,620 | 13,500 | 6,880 | 4,000 | 17,500 | 17,500 |
| Net Effect | 2,880 Cr. | 2,880 Dr. |
Shrishti’s Capital A/c Dr. 2,880
To Mannu’s Capital A/c 2,880
Solution 77 (On 31st March 2018)
Calculation of Opening Capital:
| Particulars | Abhir | Bobby | Vinny |
| Closing Capital | 8,00,000 | 6,00,000 | 4,00,000 |
| Add: Drawings | 2,40,000 | 1,00,000 | 1,00,000 |
| Less: Net Profits (2:2:1) | (60,000) | (60,000) | (30,000) |
| Opening Capital | 9,80,000 | 6,40,000 | 4,70,000 |
| Interest on Capital @ 10% | 98,000 | 64,000 | 47,000 |
| Ratio | 98 | 64 | 47 |
| Interest on Drawings @ 6% | 6,600 | 4,500 | 2,500 |
Net Profits + Interest on Drawings = 1,50,000+13,600 = Rs. 1,63,600
Interest on Capital = Rs. 2,09,000
Here the Net profits+Interest on Drawings is less than the interest on capital as shown above. So, the same has to be distributed in the ratio of interest on capital.
| Particulars | Abhir Dr. | Abhir Cr. | Bobby Dr. | Bobby Cr. | Vineet Dr. | Vineet Cr. | Firm Dr. | Firm Cr. |
| Profit distributed profit | 60,000 | 60,000 | 30,000 | 1,50,000 | ||||
| Interest on Capital Distributed | 76,712 | 50,098 | 36,790 | 1,63,600 | ||||
| Interest on Drawings Charged | 6,600 | 4,500 | 2,500 | 13,600 | ||||
| Total | 66,600 | 76,712 | 64,500 | 50,098 | 32,500 | 36,790 | 1,63,600 | 1,63,600 |
| Net Effect | 10,112 Cr. | 14,402 Dr. | 4,290 Cr. |
Bobby’s Capital A/c Dr. 14,402
To Abhir’s Capital A/c 10,112
To Vineet’s Capital A/c 4,290
Solution 78 (On 31st March, 2014)
Calculation of Opening Capital:
| Particulars | Saroj | Mahinder | Umar |
| Closing Capital | 80,000 | 60,000 | 40,000 |
| Add: Drawings | 24,000 | 24,000 | 36,000 |
| Less: Profits | (40,000) | (30,000) | (10,000) |
| Opening Capital | 64,000 | 54,000 | 66,000 |
| Interest on Capital | 6,400 | 5,400 | 6,600 |
| Interest on Drawings | 550 | 550 | 900 |
| Particulars | Saroj Dr. | Saroj Cr. | Mahinder Dr. | Mahinder Cr. | Umar Dr. | Umar Cr. | Firm Dr. | Firm Cr. |
| Profit taken back | 8,200 | 6,150 | 2,050 | 16,400 | ||||
| Interest on Capital Provided | 6,400 | 5,400 | 6,600 | 18,400 | ||||
| Interest on Drawings Charged | 550 | 550 | 900 | 2,000 | ||||
| Total | 8,750 | 6,400 | 6,700 | 5,400 | 2,950 | 6,600 | 18,400 | 18,400 |
| Net Effect | 2,350 Dr. | 1,300 Dr. | 3,650 Cr. |
Saroj’s Capital A/c Dr. 2,350
Mainder’s Capital A/c Dr. 1,300
To Umar’s Capital A/c 3,650
Solution 79 (Capitals of Kajal, Neerav)
Calculation of Opening Capital:
| Particulars | Kajal | Neerav | Alisha |
| Closing Capital | 90,000 | 3,30,000 | 6,60,000 |
| Add: Drawings | 3,60,000 | 3,60,000 | 3,60,000 |
| Less: Profits Distributed | (1,20,000) | (30,000) | (30,000) |
| Opening Capital with Interest on Capital | 3,30,000 | 6,60,000 | 9,90,000 |
| Interest on Capital @ 10% | 30,000 | 60,000 | 90,000 |
| Opening Capital without Interest on Capital | 3,00,000 | 6,00,000 | 9,00,000 |
Total Profit for the year = Profit Distributed + Interest on capital
= 1,80,000+1,80,000
= Rs. 3,60,000
| Particulars | Kajal Dr. | Kajal Cr. | Neerav Dr. | Neerav Cr. | Alisha Dr. | Alisha Cr. | Firm Dr. | Firm Cr. |
| Incorrect profits taken back @ 4:1:1 | 1,20,000 | 30,000 | 30,000 | 1,80,000 | ||||
| Incorrect Interest on Capital taken back | 30,000 | 60,000 | 90,000 | 1,80,000 | ||||
| Correct interest on capital provided | 36,000 | 72,000 | 1,08,000 | 2,16,000 | ||||
| Correct profit distributed equally | 48,000 | 48,000 | 48,000 | 1,44,000 | ||||
| Total | 1,50,000 | 84,000 | 90,000 | 1,20,000 | 1,20,000 | 1,56,000 | 3,60,000 | 3,60,000 |
| Net Effect | 66,000 Dr. | 30,000 Cr. | 36,000 Cr. |
Kajal’s Capital A/c Dr. 66,000
To Neerav’s Capital A/c 30,000
To Alisha’s Capital A/c 36,000
Solution 80 (Mohit and Shobhit)
Profits for the year = Rs. 54,000
Rohit share (1/6) = Rs. 9,000
Balance profits for Mohit and Shobhit = Rs. 45,000
| Particulars | Mohit | Shobhit | Rohit | Total |
| Profits for the year (in profit ratio) | 27,000 | 18,000 | 9,000 | 54,000 |
| Guaranteed Amount Adjustment | (600) | (400) | 1,000 | 54,000 |
| Balance Share | 26,400 | 17,600 | 10,000 | 54,000 |
Note: Deficiency will be borne by partners in the ratio of 3:2.
Solution 81 (A, B, and C)
Profit sharing ratio = 4:2:1 (A:B:C)
| Particulars | A | B | C | Total |
| Profits for the year | 1,80,000 | 90,000 | 45,000 | 3,15,000 |
| Guaranteed Amount Adjustment | (20,000) | (10,000) | 30,000 | – |
| Balance Share | 1,60,000 | 80,000 | 75,000 | 3,15,000 |
Solution 82 (Asha, Disha, and Raghav)
Profit sharing ratio = 2:3:1 (Asha:Disha:Raghav)
| Particulars | Asha | Disha | Raghav | Total |
| Profits for the year | 40,000 | 60,000 | 20,000 | 1,20,000 |
| Guaranteed Amount Adjustment | (8,000) | (12,000) | 20,000 | 0 |
| Balance Share | 32,000 | 48,0000 | 40,000 | 1,20,000 |
Solution 83 (X, Y, and Z)
| Particulars | X | Y | Z |
| Capital | 3,00,000 | 3,00,000 | 1,50,000 |
| Rate of Interest | 10% | 10% | 10% |
| Interest on Capital | 15,000 | 10,000 | 7,5000 |
Note that the partnership started on 1 October. Guaranteed profits of Rs. 80,000 are for a full year. So guarantee for the half a year will be Rs. 40,000.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: X: 15,000 Y: 10,000 Z: 7,500 | 32,500 | Net Profit | 1,60,000 |
| Profit transferred to: X: 51,000 Less: Given to Z: (1,750) = 49,250 Y: 38,250 Z: 38,250 Add: From X: 1,750 = 40,000 | 1,27,500 | ||
| Total | 1,60,000 | 1,60,000 |
Solution 84 (A, B, and C)
Profit Sharing Ratio = 5:4:1 (A:B:C)
Ratio for meeting guarantee = 1:1
| Particulars | A | B | C | Total |
| Profits for the year | 2,00,000 | 1,60,000 | 40,000 | 4,00,000 |
| Guaranteed Amount Adjustment | (5,000) | (5,000) | 10,000 | 0 |
| Balance Share | 1,95,000 | 1,55,000 | 50,000 | 54,000 |
Journal Entries:
Profit & Loss Appropriation A/c Dr. 4,00,000
To A’s Capital A/c 2,00,000
To B’s capital A/c 1,60,000
To C’s Capital A/c 40,000
(Profits for the year distributed among the partners)
A’s Capital A/c Dr. 5,000
B’s Capital A/c Dr. 5,000
To C’s Capital A/c 10,000
(Capital A/c adjusted for a guaranteed share of C)
Solution 85 (Atul, Bipul, and Charu)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Salary to Bipu A/c | 1,20,000 | Net Profit | 6,60,000 |
| Profit transferred to: Atul: 1,80,000 Less: Given to Bipu: (10,000) = 1,70,000 Bipul: 1,80,000 Add: Deficiency: 20,000 = 2,00,000 Charu: 1,80,000 Less: Given to Bipul: (10,000) = 1,70,000 | 5,40,000 | ||
| Total | 6,60,000 | 6,60,000 |
Solution 86 (Parul, Prerna, and Kushal)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Commission to Kaushal A/c | 50,000 | Net Profit | 2,50,000 |
| Profit transferred to: Parul: 66,667 Add: Deficiency: 1,33,333 = 2,00,000 Prerna: 66,667 Less: Given to Parul: (66,667) = 0 Kaushal: 66,667 Less: Given to Parul: (66,667) = 0 | 2,00,000 | ||
| Total | 2,50,000 | 2,50,000 |
Solution 87 (Nimrat, Maira, and Kabir)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Profit transferred to: Nimrat: 40,000 Add: Deficiency: 1,20,000 | 1,60,000 | Net Profit | 1,00,000 |
| Loss transferred to: Maira: 40,000 Less: Given to Nimrat: (80,000) = 40,000 Kabir: 20,000 Less: Given to Nimrat: (40,000) = 20,000 | 60,000 | ||
| Total | 1,60,000 | 1,60,000 |
Solution 88 (Ashmit, Abbas, and Karman)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Net Loss | 30,000 | Loss transferred to: Ashmit: 15,000 Add: Given to Abbas: 1,20,000 = 1,35,000 Karman: 5,000 Add: Given to Abbas: 40,000 = 45,000 | 1,80,000 |
| Profit transferred to: Abbas: (10,000) Add: Deficiency: 1,60,000 | 1,50,000 | ||
| Total | 1,80,000 | 1,80,000 |
Solution 89 (P, Q, and R)
Profit Sharing Ratio = 12:8:5 (P:Q:R)
Ratio of meeting guarantee = 12:8 (P:Q)
For 2022:
| Particulars | P | Q | R |
| Profits for the year | 57,600 | 38,400 | 24,000 |
| Guaranteed Amount Adjustment | (3,600) | (2,400) | 6,000 |
| Balance Share | 54,000 | 36,000 | 30,000 |
Journal Entries:
Profit & Loss Appropriation A/c Dr. 1,20,000
To P’s Capital A/c 57,600
To Q’s Capital A/c 38,400
To R’s Capital A/c 24,000
(Profits for the year distributed among the partners)
P’s Capital A/c Dr. 3,600
Q’s Capital A/c Dr. 2,400
To R’s Capital A/c 6,000
(Capital A/c adjusted for a guaranteed share of R)
For 2023:
Profit & Loss Appropriation A/c Dr. 1,80,000
To P’s Capital A/c 86,400
To Q’s Capital A/c 57,600
To R’s Capital A/c 36,000
(Profits for the year distributed among the partners)
Note: No guarantee adjustment is required in this case.
For 2024:
| Particulars | P | Q | R |
| Loss for the year | (57,600) | (38,400) | (24,000) |
| Guaranteed Amount Adjustment | (32,400) | (21,600) | 54,000 |
| Balance Share | (90,000) | (60,000) | 30,000 |
Journal Entries:
P’s Capital A/c Dr. 57,600
Q’s Capital A/c Dr. 38,400
R’s Capital A/c Dr. 24,000
To Profit & Loss Appropriation A/c 1,20,000
(Loss for the year distributed among the partners)
P’s Capital A/c Dr. 32,400
Q’s Capital A/c Dr. 21,600
To R’s Capital A/c 54,000
(Capital A/c adjusted for a guaranteed share of profit)
Solution 90 (P and Q)
P:Q = 5:3 and R is admitted for 1/8 share of profit.
The new profit-sharing ratio will be 35:21:8 between P, Q, and R respectively.
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Profit transferred to: P: 2,18,750 Less: Given to R: (15,000) = 2,03,750 Q: 1,31,250 Less: Given to R: (10,000) = 1,21,250 R: 50,000 Add: Deficiency: 25,000 = 75,000 | 4,00,000 | Net Profit | 4,00,000 |
| Total | 4,00,000 | 4,00,000 |
Goodwill TS Grewal Solutions 2024-25
Solution 91 (A and B)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Profit transferred to: A: 1,08,000 Less: Given to C: (11,250) = 96,750 B: 72,000 C: 45,000 Add: Deficiency: 11,250 = 56,250 | 2,25,000 | Net Profit | 2,25,000 |
| Total | 2,25,000 | 2,25,000 |
Working Notes:
1. C’s Earnings as a manager
Net Profits for the year = 2,25,000
Less: Salary = (27,000)
Net Profit after Salary = 1,98,000
Commission after such commission @10% = Rs. 18,000
(1,98,000*10/110)
Calculation of total earnings as a manager
Salary = Rs. 27,000
Commission = Rs. 18,000
Total = Rs. 45,000
2. C’s share as a partner
(2,25,000*1/4) = Rs. 56,250
Excess as a partner = Rs. 11,250
3. Profit share of A and B
Total Profits = 2,25,000
Less: C’s Share as a manager = (45,000)
Balance Profits = Rs. 1,80,000
A’s Share = 1,08,000-11,250 = Rs. 96,750 (after giving a share to C)
B’s Share = Rs. 72,000 (in 3:2 profit sharing ratio)
Solution 92 (Asgar, Chaman, and Dholu)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Asgar: 48,000 Chaman: 40,000 Dholu: 32,000 | 1,20,000 | Net Profit | 4,24,000 |
| Partner’s Salary A/c: Chaman: 84,000 Dholu: 40,000 | 1,24,000 | ||
| Profit transferred to: Asgar: 80,000 Less: Given to Dholu: (10,000) = 70,000 Dhaman = 40,000 Dholu: 60,000 Add: From Asgar: 10,000 = 70,000 | 2,10,000 | ||
| Total | 4,24,000 | 4,24,000 |
Working Note: Calculation of Deficiency for Dholu
Guaranteed Amount = Rs. 1,10,000
Less: Actual Profit = (1,00,000)
Deficiency = Rs. 10,000
Solution 93 (The partners of a firm)
Working Note:
| Particulars | Alia (Rs.) | Bhanu (Rs.) | Chand (Rs.) | Total (Rs.) |
| Profit Share | 15,000 | 15,000 | 10,000 | 40,000 |
| Guarantee Adjustment | 20,000 | (10,000) | (10,000) | 0 |
| Total Share | 35,000 | 5,000 | 0 | 40,000 |
| Particulars | Alia Dr. | Alia Cr. | Bhanu Dr. | Bhanu Cr. | Chand Dr. | Chand Cr. | Firm Dr. | Firm Cr. |
| Incorrect profit taken | 30,000 | 30,000 | 20,000 | 80,000 | ||||
| Commission provided | 4,000 | 4,000 | ||||||
| Salary provided | 18,000 | 18,000 | 36,000 | |||||
| Correct profit distribution | 35,000 | 5,000 | 0 | 40,000 | ||||
| Total | 30,000 | 53,000 | 30,000 | 9,000 | 20,000 | 18,000 | 80,000 | 80,000 |
| Net Effect | 23,000 Cr. | 21,000 Dr. | 2,000 Dr. |
Bhanu’s Capital A/c Dr. 21,000
Chand’s Capital A/c Dr. 2,000
To Alia’s Capital A/c 23,000
Solution 94 (Ajay, Binay, and Chetan)
Working Note 1:
| Particulars | Ajay (Rs.) | Binay (Rs.) | Chetan (Rs.) | Total (Rs.) |
| Profit Share | 47,250 | 47,250 | 31,500 | 1,26,000 |
| Guarantee Adjustment (Ajay and Chetan to bear in 3:2) | (1,650) | 2,750 | (1,100) | 0 |
| Total Share | 45,600 | 50,000 | 30,400 | 1,26,000 |
| Particulars | Ajay Dr. | Ajay Cr. | Binay Dr. | Binay Cr. | Chetan Dr. | Chetan Cr. | Firm Dr. | Firm Cr. |
| Incorrect profit taken back | 60,000 | 60,000 | 30,000 | 1,50,000 | ||||
| Salary provided | 8,000 | 8,000 | 16,000 | |||||
| Commission provided | 8,000 | 8,000 | ||||||
| Correct profit distribution | 45,600 | 50,000 | 30,400 | 1,26,000 | ||||
| Total | 60,000 | 53,600 | 60,000 | 58,000 | 30,000 | 38,400 | 1,50,000 | 1,50,000 |
| Net Effect | 6,400 Dr. | 2,000 Dr. | 8,400 Cr. |
Ajay’s Capital A/c Dr. 6,400
Binay’s Capital A/c Dr. 2,000
To Chetan’s Capital A/c 8,400
Solution 95 (Ankur, Bhavna, and Disha)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Interest on Capital A/c: Ankur: 84,000 Bhavna: 36,000 Disha: 24,000 | 1,44,000 | Net Profit | 9,50,000 |
| Bhawna’s Salary A/c | 50,000 | ||
| Disha’s Commission A/c | 36,000 | ||
| Profit transferred to: Ankur: 4,20,000 Less: Given to Disha: (6,000) = 4,14,000 Bhavna = 1,80,000 Disha: 1,20,000 Add: From Asgar: 6,000 = 1,26,000 | 7,20,000 | ||
| Total | 9,50,000 | 9,50,000 |
Working Notes:
1) Calculation of Deficiency for Bhavna
Salary = 50,000
Profit Share = 1,80,000
Total = 2,30,000
Guarantee = 1,70,000
No guarantee claim is required as the share of profit is already higher than the minimum guarantee amount.
2) Calculation of Deficiency for Disha
Interest on Capital = 24,000
Profit Share = 1,20,000
Total = 1,44,000
Less: Guarantee = (1,50,000)
Deficiency = Rs. 6,000
Solution 96 (Three chartered accountants)
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Profit transferred to: Abhijit’s Capital A/c: 42,000 Less: Given to Charanjit: (600) = 41,400 Baljit’s Capital A/c:28,000 Less: Given to Charanjit: (400) = 27,600 Charanjit’s Capital A/c: 14,000 Add: 1000 = 15,000 (From Abhijit and Baljit) | 84,000 | Net profit | 75,000 |
| Baljit’s Capital A/c (Guarantee of gross fees) | 9,000 | ||
| Total | 84,000 | 84,000 |
Solution 97 (Xen, Sam, and Tim)
In this question separate adjustment entries are required for each error as follows:
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
| 1. | Xen’s Capital A/c Dr. Sam’s Capital A/c Dr. Tim’s Capital A/c Dr. To Profit and Loss Adjustment A/c | 40,000 40,000 40,000 | 1,20,000 | |
| 2. | Sam’s Capital A/c Dr. To Profit and Loss Adjustment A/c | 15,000 | 15,000 | |
| 3. | Profit and Loss Adjustment A/c Dr. To Xen’s Capital A/c To Sams Capital A/c To Tim’s Capital A/c | 1,35,000 | 54,000 54,000 27,000 |
So, these are the Fundamentals of Partnership TS Grewal Solutions 2024-25. If you find any answer is wrong, you can comment that which could help us to correct it.
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