1. ACCOUNTANCY
CLASS-XII
SOLUTION WITH EXPLANATION
By Geeta Handa
BOOK : Double Entry Book Keeping
T.S.GREWAL’S
Accounting For Partnership- Fundamentals
Q 87: Partners : Asgar ,Chaman and Dholu
Geeta Handa
2. Geeta Handa
PGT Accountancy
• 20 years experience of teaching
accountancy.
• 14 years experience of checking
accountancy papers of CBSE
• Worked as examiner for conducting
practical exam of accountancy.
Geeta Handa
3. Q87 Asgar, Chaman and Dholu are partners in a firm. Their Capital Accounts stood at
Rs.6,00,000; Rs.5,00,000 and Rs.4,00,000 respectively on 1st April, 2019. They shared
Profit and Losses in the proportion of 4 : 2 : 3. Partners are entitled to interest on
capital @8% per annum and salary to Chaman and Dholu @Rs.7,000 per month and
Rs.10,000 per quarter respectively as per the provision of the Partnership Deed.
Dholu’s share of profit (excluding interest on capital but including salary) is
guaranteed at a minimum of Rs.1,10,000 p.a. Any deficiency arising on that account
shall be met by Asgar. The profit for the year ended 31st march,2020 amounted to
Rs.4,24,000.
Prepare Profit and Loss Appropriation Account for the year ended 31st March,2020.
Geeta Handa
4. Q87 Asgar, Chaman and Dholu are partners in a firm. Their Capital Accounts stood at
Rs.6,00,000; Rs.5,00,000 and Rs.4,00,000 respectively on 1st April, 2019. They shared
Profit and Losses in the proportion of 4 : 2 : 3. Partners are entitled to interest on
capital @8% per annum and salary to Chaman and Dholu @Rs.7,000 per month and
Rs.10,000 per quarter respectively as per the provision of the Partnership Deed.
Dholu’s share of profit (excluding interest on capital but including salary) is
guaranteed at a minimum of Rs.1,10,000 p.a. Any deficiency arising on that account
shall be met by Asgar. The profit for the year ended 31st march,2020 amounted to
Rs.4,24,000.
Prepare Profit and Loss Appropriation Account for the year ended 31st March,2020.
Guarantee of profit to a Partner
Geeta Handa
5. Workings :-
Partners Opening Capital IOC 8% p.a.
Asgar 6,00,000 48,000
Chaman 5,00,000 40,000
Dholu 4,00,000 32,000
Total 1,20,000
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6. Workings :-
Chaman’s Salary = 7,000 per month
= 7,000 x 12
= Rs.84,000
Dholu’s Salary = 10,000 per quarter
= 10,000 x 4
= Rs.40,000
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7. Profit and Loss Appropriation Account
( for the year ended 31st March 2020 )
Dr. Particulars Rs. Particulars Rs. Cr.
By Profit and Loss A/c (Net Profit) 4,24,000
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8. Profit and Loss Appropriation Account
( for the year ended 31st March 2020 )
Dr. Particulars Rs. Particulars Rs. Cr.
To Interest on Capital A/c By Profit and Loss A/c (Net Profit) 4,24,000
Asgar 48,000
Chaman 40,000
Dholu 32,000 1,20,000
Geeta Handa
9. Profit and Loss Appropriation Account
( for the year ended 31st March 2020 )
Dr. Particulars Rs. Particulars Rs. Cr.
To Interest on Capital A/c By Profit and Loss A/c (Net Profit) 4,24,000
Asgar 48,000
Chaman 40,000
Dholu 32,000 1,20,000
To Partners ‘ Salaries A/c
Chaman 84,000
Dholu 40,000 1,24,000
Geeta Handa
10. Profit and Loss Appropriation Account
( for the year ended 31st March 2020 )
Dr. Particulars Rs. Particulars Rs. Cr.
To Interest on Capital A/c By Profit and Loss A/c (Net Profit) 4,24,000
Asgar 48,000
Chaman 40,000
Dholu 32,000 1,20,000
To Partners ‘ Salaries A/c
Chaman 84,000
Dholu 40,000 1,24,000
To Profit transferred to :
(Balance Amount) * 1,80,000
4,24,000 4,24,000Geeta Handa
11. Workings Note :-
Partners Asgar Chaman Dholu
Profit Sharing Ratio 4 : 2 : 3
Share of Profit 1,80,000 x
4
9
1,80,000 x
2
9
1,80,000 x
3
9
= 80,000 = 40,000 = 60,000
Geeta Handa
12. Workings Note :-
Dholu’s Share of Profit = 60,000
Add Salary = 40,000
1,00,000
Guaranteed Profit = Rs.1,10,000
Deficiency to be borne by Asgar = 1,10,000 – 1,00,000 = Rs.10,000
Geeta Handa
13. Workings Note :-
Partners Asgar Chaman Dholu
Profit Sharing Ratio 4 : 2 : 3
Share of Profit 1,80,000 x
4
9
1,80,000 x
2
9
1,80,000 x
3
9
= 80,000 =40,000 =60,000
Deficiency - 10,000 ------- + 10,000
Share of Profit transferred 70,000 40,000 70,000
to Partners’ Capital A/c
Geeta Handa
14. Profit and Loss Appropriation Account
( for the year ended 31st March 2020 )
Dr. Particulars Rs. Particulars Rs. Cr.
To Interest on Capital A/c By Profit and Loss A/c (Net Profit) 4,24,000
Asgar 48,000
Chaman 40,000
Dholu 32,000 1,20,000
To Partners ‘ Salaries A/c
Chaman 84,000
Dholu 40,000 1,24,000
To Profit transferred to : (W.N.)
Asgar’s Capital A/c 70,000
Chaman’s Capital A/c 40,000
Dholu’s Capital A/c 70,000 1,80,000
4,24,000 4,24,000Geeta Handa
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