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Holiday Assignment(2022-23)

Instructions:

 To be done in homework notebook

 To be submitted on 4th July

Holiday cum Revision Assignment of Fundamentals

1. What is the maximum limit of the partners ? Also state where it is prescribed ?

2. A and B are Partners sharing profits and losses in the ratio of 3:2. On
April1,2021, Their capitals stood as ₹2,00,000 and ₹1,50,000 respectively On
July1,2021, A introduced ₹40,000 while B introduced ₹20,000 as additional
capital. On Jan1,2022 , A withdrew ₹30,000 from his capital. Calculate interest on
their capitals @ 12% p.a.

3. Calculate interest on Partner’s drawings @ 6% p.a. in each of the following

cases for the year 2021-22 :

a) P withdrew ₹4,000 p.m. in the beginning of every month during the last
six months.
b) Q withdrew ₹3,000 at the end of every alternate month starting from
April.
c) R withdrew ₹6,000 in the middle of each quarter .
d) S withdrew ₹20,000 at the end of each half year.
e) T withdrew ₹60,000 on Dec.1,2021 and ₹40,000 on Feb.1,2022 .
f) U withdrew as under :
₹
On April30,2021 10,000
On July1,2021 15,000
On Dec.15,2021 40,000
On Jan30,2022 60,000

4. Mira and Khyati are partners sharing profits and losses in the ratio 2:3. Their
capitals stood at ₹3,00,000 and ₹4,00,000 as at 31st March ,2022. During the year

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2021-22, the firm earned a net profit of ₹1,20,000 and partners withdrew ₹40,000
and ₹30,000 respectively. Find out Interest on their capitals @ 6% p.a.

5. A firm earned a profit of ₹1,02,400 I, 2021-22 before adjustment of the

following :

i. Interest on Partner’s loan of ₹40,000 .

ii. Rent payable to a partner ₹1,000 per month.
iii. Salary payable to a partner ₹10,000 p.a.
iv. Manager’s commission @ 10% of the net profit after charging such
commission.

Find actual net profit earned during the year 2021-22 and also pass
necessary journal entries for the above.

6. Calculate A’s commission and B’s commission from the following information :

i. Interest allowed on capitals – A ₹20,000 and B ₹10,000.

ii. Salary allowed to B ₹80,000 p.a.
iii. A is allowed a commission of 10% on the profit after debiting (charging)
interest and salary.
iv. B is allowed a commission of 20% on the profit after deducting interest on
capital, salary and all commissions.
v. Net profit earned during the year after charging B’s Salary was ₹3,75,000.

7. Lucky and Kamna are partners sharing profits and losses as 5:3. Their fixed
capitals and current accounts as on April1,2021 were as under:

Capitals Accounts: Lucky ₹4,00,000 ; and Kamna ₹3,00,000

Current Accounts : Lucky ₹80,000(Cr.) ; and Kamna ₹25,000 (Dr.)

During the year 2021-22, Kamna further invested ₹60,000 in the business.

Their partnership deed provided that :

a) Lucky will draw a quarterly salary of ₹20,000.

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b) Kamna will be allowed a commission of 10% on the net profit after

deducting Lucky’s salary.
c) Interest on capital is allowed @ 10%
d) Interest on partners drawing is to be charged @6%. (Lucky drew ₹40,000 on
July1,2021 while Kamna drew ₹3,000 per month in the middle of every
month)
e) 15% of the divisible profit is to be transferred to General Reserve.
f) Net profit for the year 2021-22 before adjustment of rent payable to
partner ₹21,000 was ₹3,71,000.

Prepare P&L Appropriation A/c , Capital and Current A/cs.

8. P and Q are partners sharing profits and losses as 3:2. Their capitals accounts
as on April1,2021 were as under:

Capitals Accounts: P ₹2,00,000 ; and Q ₹1,50,000

Their partnership deed provided that :

a) P will draw a quarterly salary of ₹20,000.

b) Q will be allowed a commission of 10% on the net profit after charging his
commission.
c) Interest on capital is allowed @ 10% p.a.

The firm earned a net profit of ₹1,10,000.

Show division of profit / loss by making relevant account in the following cases :

a) Salary, Commission and Interest on capitals is to be treated as a charge .

b) Salary, Commission and Interest on capitals is to be treated as an appropriation

.

9. A, B and C are partners sharing profits as 3:1:1. They divided the profits for the
year 2021-22 without providing for the under stated provisions :

a) Interest on Capital @ 10%p.a.

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b) Interest on drawings : A ₹350 ; B ₹250 ; C ₹150 .

c) Salary of ₹5,000 to A and ₹7,500 to B .

d) Commission to A on achieving sales target ₹3,000.

Their Capital A/c as on April1,2021 were :

A ₹25,000 ; B ₹20,000 ; C ₹15,000

You are required to pass an adjustment entry to rectify the above .

10. Raja , Roopa and Mala sharing profits and losses equally have fixed capitals of
₹12,00,000 , ₹9,00,000 and ₹6,00,000 respectively.

For the year ended 31st March,2022 , interest on capital was credited to them @
6% instead of @5%. Give necessary adjustment entry .

11. Priya and Bina are partners in a firm sharing profits and losses in the ratio of
3:2. Their capital balances as on 31.3.2022 stood as under :

Priya : ₹80,000 ; Bina : ₹40,000

The profit for the year ended 31.3.2022 ₹30,000 were divided between the
partners without allowing interest capital @ 12% p.a. and salary to Priya @
₹1,000 per month. During the year Priya withdrew ₹8,000 and Bina withdrew
₹4,000. Pass rectifying entry on April1,2023.

12. X , Y and Z are Partners sharing profit in the ratio 5:3:2. It is

provided that Z’s profit share will not be less than ₹1,50,000 in any year.

During the year 2018-19, the firm earned a profit of ₹6,00,000.

Prepare Profit and Loss Appropriation A/c and also Journalise the above.

13. A, B and C are Partners sharing profit in the ratio of 3:2:1. Their

capitals as at 1st April,2021 were as under :

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A ₹5,00,000 ; B ₹3,00,000 ; and C ₹2,00,000

They were entitled to interest on capitals @10%.

B had guaranteed that his contribution towards the profits of the firm will not be

less than ₹1,00,000 in any year (though he had earned only ₹60,000 during 2021-
22. C’s share (including interest on capital) is guaranteed by A to be not less than
₹2,00,000 in any year.

The Firm earned a net profit of ₹10,20,000 during the year ended on 31st
March,2022. Prepare Profit and Loss Appropriation A/c for 2021-22.

14. L , M and N are Partners sharing profit in the ratio 5:3:2. It is

provided that M’s profit share will not be less than ₹1,50,000 in any year.

During the year 2021-22, the firm suffered a loss of ₹2,00,000.

Journalise the above.

Holiday cum Revision Assignment of change in Profit Sharing Ratio

1. ABC Firm earned profits and losses in last 4 years as under :

31.3.19 ₹40,000
31.3.20 ₹50,000
31.3.21 ₹70,000
31.3.22 (₹20,000)
a) Goodwill is to be valued at two year’s purchase of last three year’s profits.
b) Goodwill is to be valued at twice the aggregate profits of last four years
less 20%.
c) Goodwill is to be valued at the total of last three years profits plus 10%.
Find Value of Goodwill in each of the above case.

2. An existing firm had assets of ₹4,70,000 (excluding Cash ₹20,000 and Debtors
₹10,000 , including non trading investments ₹1,00,000). The Partner’s capital
accounts showed a balance of ₹3,00,000 and reserves constituted the rest. If
the
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normal rate of return is 12% and the value of goodwill of the firm is valued at
₹60,000 at 1.5 times of super profits , find the average profits.

3. P , Q and R are partners sharing profits in the ratio of 5:3:2 . Their net assets
are
₹40,00,000 and value of non current liabilities is ₹10,00,000 . Capital is
₹25,00,000 and Reserves and Accumulated profits are of ₹15,00,000 . Average
capital employed in the business is ₹45,00,000. All firms in the industry are
expected to earn minimum returns @18%. Average profits are ₹14,40,000 .
a) Goodwill is to be valued by capitalization of average profits .
b) Goodwill is to be valued at two year’s purchase of super profits.

4. A and B are partners sharing profits and losses equally. On april 1,2022, they
decided to change their profit sharing ratio to 3:2. On that date their books
showed General Reserve ₹40,000 and Goodwill of the firm was valued at
₹60,000.
Pass necessary journal entries for the above.

5. L , M and N are partners sharing profits in the ratio of 5:3:2. On april1,2022

they
decided to change their ratio to 3:2:1. Goodwill of the firm was valued at ₹
90,000 and following balances were extracted from their books as on that date:
₹
Advertisement Suspense A/c 30,000
Profit and Loss A/c (Dr) 60,000
Contingency Reserve 1,20,000
Profit on Revaluation 30,000
Partners decided to leave the Profit and Loss A/c and Contingency Reserve
undisturbed. They also decided not to record the revised values of assets and
liabilities in the books.
Pass necessary journal entries for the above.

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6. Mishki and Khushi are partners sharing profits and losses as 2:1. On april1,2022
they decided to change their ratio to 7:3. Pass necessary journal entries for the
following at the time of change in ratio if partners decide to record the revised
values of assets and liabilities in the books :
a) Investments are to be written down by ₹ 6,000 (IFR stood at ₹ 30,000 in the
books)
b) Workmens compensation is estimated at ₹ 10,000 ( WCR stood at ₹7,000 in
the books)
c) Provision for bad debts is increased by ₹ 9,000.
d) Building is appreciated by ₹ 40,000.
e) Stock worth ₹ 2,000 was obsolete and hence to be written off.