The partners of a firm distributed the profits for the year ended 31st March 2023, ₹ 4,50,000 in the ratio of 3:2:1 without providing for the following adjustments:
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Hari and Kunal were partners in a firm sharing profits in the ratio of 5:3. Their fixed capitals on 31st March 2022 were: Hari ₹ 60,000 and Kunal ₹ 80,000. They agreed to allow interest on capital @ 12% p.a.
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Lalan and Balan were partners in a firm sharing profits in the ratio of 3:2. Their fixed capital on 1st April 2022 was: Lalan ₹ 10,00,000 and Balan ₹ 20,00,000
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Choose the correct sequence of the following transactions in the context of the Division of Profits:
Ans – c) First Profit is transferred to the Profit and Loss Appropriation Account. Second it is raised by guarantee given by partners to the firm Third guarantee give by firm to the partner is considered At the end guarantee…
A, B, and C are partners. A’s Capital is ₹ 3,00,000 and B’s Capital is ₹ 1,00,000. C has not invested any amount as capital but he alone manages the whole business. C wants ₹ 30,000 p.a. as salary, though the deed is silent.
Ans – d) In the absence of a partnership deed. The profit is divided equally among partners. The salary to the partners is not allowed in the absence of partnership deed.
Vihaan and Mann are partners sharing profits and losses in the ratio of 3:2. The firm maintains fluctuating capital accounts and the balance of the same as of 31st March 2022 is ₹ 4,00,000 and ₹ 4,65,000 for Vihaan and Mann respectively.
Ans – d) Explanation:-
Pawan, manager of the firm, is admitted as partner w.e.f 1st April 2022 to manage the business. The salary paid to him during the year ended 31st March 2023 will be
Ans – d) The salary paid to the partner is an appropriation. Thus it is debited to Profit and Loss Appropriation Account.
A, B, and C are partners sharing profits in the ratio of 5:4:1. C is given a guarantee that his share in a year will not be less than ₹ 50,000. Profit for the year ended 31st March 2023 is ₹ 4,00,000.
Ans – b) Explanation:- C’s Share in Profit = 4,00,000 * 1/10 = ₹ 40,000 Deficiency in C’s Share in Profit as per guarantee = ₹ 50,000 – ₹ 40,000 = ₹ 10,000 Deficiency of C ₹ 10,000 met by…
A and B are partners with capitals of ₹ 2,00,000 and ₹ 1,00,000 respectively. Interest payable on capital is 10% p.a. Determine the amount of appropriation of each partner when the profit earned by the firm is ₹ 24,000.
Ans – d) Here is the explanation
Vidit and Seema were partners in a firm sharing profits and losses in the ratio of 3:2. Their capitals were ₹ 1,20,000 and ₹ 2,40,000 respectively. They were entitled to interest on capital @ 10%. The firm earned profit of ₹ 18,000 during the year. The interest on Vidit’s capital will be
Ans – d) Explanation:- Vidit’s Interest on capital = 1,20,000 * 10% = ₹ 12,000 Seema’s Interest on capital = 2,40,000 * 10% = ₹ 24,000 Total interest of both the partners = 12,000 + 24,000 = ₹ 36,000 As…