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Assingnment 2

The document contains a series of questions related to the preparation of Profit and Loss Appropriation Accounts and Partners' Capital Accounts for various partnership scenarios. Each question provides specific details about capital contributions, profit-sharing ratios, interest on capital, salaries, commissions, and net profits that need to be accounted for. The questions require the application of accounting principles to prepare the necessary financial statements for the respective partnerships.

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Arun Arora
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34 views

Assingnment 2

The document contains a series of questions related to the preparation of Profit and Loss Appropriation Accounts and Partners' Capital Accounts for various partnership scenarios. Each question provides specific details about capital contributions, profit-sharing ratios, interest on capital, salaries, commissions, and net profits that need to be accounted for. The questions require the application of accounting principles to prepare the necessary financial statements for the respective partnerships.

Uploaded by

Arun Arora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Question No 1

Prepare Profit and Loss Appropriation Account and Partners Capital Account

Question No 2 A and B are partners in a firm sharing profits and losses in


the ratio of 4:1. On 1st April 2018, their capitals were ₹20,000 and ₹10,000
respectively. The partnership deed specifies the following:
(a) Interest on capital is to be allowed at 5% per annum.
(b) Interest on drawings charged to A and B are ₹200 and ₹300 respectively.
(c) The net profit of the firm before considering interest on capital and
interest on drawings amounted to ₹18,000.
Give necessary journal entries and prepare Profit and loss appropriation
account for the year ending 31st March 2019.
Question No 3 Anand and Narayanan are partners in a firm sharing profits
and losses in the ratio of 5:3. On 1st April 2018, their capitals were ₹ 50,000
and ₹ 30,000 respectively. The partnership deed specifies the following:
(a) Interest on capital is to be allowed at 6% per annum.
(b) Interest on drawings charged to Anand and Narayanan are ₹ 1,000 and ₹
800 respectively.
(c) The net profit of the firm before considering interest on capital and
interest on drawings amounted to ₹ 35,000. Give necessary journal entries
and prepare profit and loss appropriation account as on 31st March 2019.
Question No 4 Dinesh and Sugumar entered into a partnership agreement
on 1st April 2018, Dinesh contributing ₹1,50,000 and Sugumar ₹1,20,000 as
capital. The agreement provided that:
(a) Profits and losses to be shared in the ratio 2:1 as between Dinesh and
Sugumar. (b) Partners to be entitled to interest on capital @ 4% p.a.
(c) Interest on drawings to be charged Dinesh: ₹3,600 and Sugumar: ₹2,200
(d) Dinesh to receive a salary of ₹60,000 for the year, and
(e) Sugumar to receive a commission of ₹ 80,000 During the year ended on
31st March 2019, the firm made a profit of ₹2,20,000 before adjustment of
interest, salary and commission. Prepare the Profit and loss appropriation
account.
Question No 5 Aand B entered into a partnership agreement on 1st April
2018, A contributing ` ₹25,000 and B ₹30,000 as capital. The agreement
provided that:
(a) Profits and losses to be shared in the ratio 2:3 as between A and B.
(b) Partners to be entitled to interest on capital @ 5% p.a.
(c) Interest on drawings to be charged A: ₹300 B : ₹450
(d) A to receive a salary of ₹5,000 for the year, and
(e) B to receive a commission of ₹ 2,000 During the year, the firm made a profit of
₹20,000 before adjustment of interest, salary and commission.
Prepare the Profit and loss appropriation account and Partners capital account
Question no 6 A, B and C are partners in a firm. Their capital balances as
on 1.4.16 were ₹50,000, ₹60,000 and ₹70,000 respectively. Prepare Profit
and Loss Appropriation Account for the year ended 31.3.17 after considering
the following information:
(i) Interest on Capital @ 5% p.a.
(ii) C is entitled to get salary ₹1,500 p.m.
(iii) Net profit before charging above ₹51,000
(iv) Partners will share profit or loss equally.
Question no 7 A, B and C are partners in a firm. Their capital balances as on
1.1.16 were ₹50,000, ₹40,000 and ₹30,000 respectively. Prepare Profit and
Loss Appropriation Account for the year ended 31.12.16 after considering the
following information:
(i) Interest on Capital @ 10% p.a.
(ii) A will get a monthly salary of ₹800
(iii) Net profit before considering the above is ₹50,000
(iv) 10% of profit should be transferred to general reserve
(v) The ratio of sharing profit and loss by A, B and C is 4:3:2.
Question no 8
Question no 9 Triphati and Chauhan are partners in a firm sharing profits
and losses in the ratio of 3:2. Their capitals were ₹ 60,000 and ₹ 40,000 as on
April 01, 2005. During the year, they earned a profit of ₹ 30,000. According to
the partnership deed both the partners are entitled to ₹ 1,000 per month as
Salary and 5% interest on their capital. They are also to be charged an
interest of 5% on their drawings, irrespective of the period, which is ₹ 12,000
for Tripathi, ₹ 8,000 for Chauhan. Prepare Profit and Loss Appropriation
Account Partner’s Accounts capital account
Question no 10 Anubha and Kajal are partners of a firm sharing profits
and losses in the ratio of 2:1. Their capital, were ₹ 90,000 and ₹ 60,000.
The profit during the year were ₹ 45,000. According to partnership
deed, both partners are allowed salary, ₹ 700 per month to Anubha and
₹ 500 per month to Kajal. Interest allowed on capital @ 5%p.a. The 1
drawings at the end of the period were ₹ 8,500 for Anubha and ₹ 6,500
for Kajal. Interest is to be charged @ 5% p.a. on drawings. Prepare
partners’ capital accounts, and Profit and loss appropriation account
Question no 11 Rakhi and Shikha are partners in a firm, with capitals of ₹
2,00,000 and ₹ 3,00,000 respectively. The profit of the firm, for the year
ended 2014-15 is ₹ 23,200. As per the Partnership agreement, they share the
profit in their capital ratio, after allowing a salary of ₹ 5,000 per month to
Shikha and interest on Partner’s capital at the rate of 10% p.a. During the
year Rakhi withdrew ₹ 7,000 and Shikha ₹ 10,000 for their personal use. You
are required to prepare Profit and Loss Appropriation Account and Partner’s
Capital Accounts.

Question no 12
Question 13 Ram and Shyam started a partnership business on 1st April 2019.
Their capital contributions were ₹2,50,000 and ₹1,50,000 respectively. The
partnership deed provided:
1) Interest allowed on capitals @10% p.a.
2) Ram, get a salary of ₹4,000 p.m. and Shyam ₹2,000 p.m.
3) Profits are to be shared in the ratio of 3:2.
4) Their Drawings are ₹30,000 and ₹20,000 respectively
5) Interest charged on Drawings amounted to₹1,200 for Ram and ₹800 for
Shyam.
The profits for the year ended 31st March 2020 before making the above
appropriations were ₹2,00,000. The books are closed on March 31, every year.
Prepare Profit and Loss Appropriation Account and Partners capital accounts,
assuming that the capital account are fluctuating.
Question no 14 A, B and C are partners in a firm with capitals ₹4,00,000,
₹3,00,000 and ₹3,00,000 respectively on 1st April, 2017. The partnership
deed contains the following clauses:
(i) Interest on Capital @ 5% p.a.
(ii) Interest on drawing @ 6% p.a.
(iii) A gets salary ₹4,000 p.m.
(iv) B gets commission @ 10% on the Net Profit
(v) Profits and losses to be shared: A:B:C = 4:3:3
The net profit of the firm for the year ended 31st December, 2017 amounted
to ₹4,80,000 and the drawings of the partners are: A = ₹ 30,000, B =₹20,000
and C = ₹10,000.
Prepare Profit and Loss Appropriation Account for the year ended on
31.3.2018.
Question No 15 Mohit, Rachit, and Shubh started a partnership business on
1st April, 2019. Their capital contributions were ₹4,00,000 , ₹3,00,000 and
₹2,00,000 respectively. The partnership deed provided:
Interest allowed on capitals @ 10% p.a.
Mohit, get a salary of ₹5,000 p.m. and Rachit ₹3,000 p.m.
Profits are to be shared in the ratio of 5:3:2.
Their Drawings are ₹50,000, ₹40,000 and ₹30,000 respectively
Interest charged on Drawings @ 5 % p.a.
Shubh get a commission₹24,000.
The profits for the year ended 31st March, 2020 before making above
appropriations were ₹ 3,97,000. Prepare Profit and Loss Appropriation
Account and Partners Capital account
Question No 16 Monika and Krishan are partners with a capital of ₹ 80,000
and ₹ 1,00,000 respectively on 1st April 2019. They agree on the followings:
(a) To share profit equally.
(b) Interest allowed on capital @ 9% p.a.
(c) Interest charged on drawing @ 6% p.a.
(d) Salary to be paid to Krishan @ ₹ 600 per month.
(e) Monika withdrew ₹8,000 and Krishan ₹ 6,000 during the year.
Profit for the year ending 31st March 2020 was ₹ 56,000 before the
above appropriations. You are required to prepare Profit and Loss
Appropriation account and partners’ capital accounts
Question no 17 Richard and Rizwan started a business on 1st April 2018
with capitals of ₹ 3,00,000 and ₹ 2,00,000 respectively. According to the
Partnership Deed
(a) Interest on capital is to be provided @ 6% p.a.
(b) Rizwan is to get salary of ₹ 50,000 per annum.
(c) Richard is to get 10% commission on profit (after interest on capital and
salary to Rizwan) after charging such commission.
(d) Profit-sharing ratio between the two partners is 3:2. During the year, the
firm earned a profit of
₹ 3,00,000. Prepare profit and loss appropriation account. The firm closes its
accounts on 31st March every year.

Question no 18 Antony and Ranjith started a business on 1st April 2018 with
capitals of ₹4,00,000 and ₹ 3,00,000 respectively. According to the
Partnership Deed, Antony is to get salary of ₹90,000 per annum, Ranjith is to
get 25% commission on profit after allowing salary to Antony and interest on
capital @ 5% p.a. but after charging such commission. Profit-sharing ratio
between the two partners is 1:1. During the year, the firm earned a profit of
₹3,65,000. Prepare profit and loss appropriation account. The firm closes its
accounts on 31st March every year.

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