Accounting for Partnership Firms-Partnership [CBSE (Central Board of Secondary Education) Class-12 Accountancy]: Questions 17 - 19 of 38
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Question 17
Question 18
Write in Short Short Answer▾
A and B are partners sharing profits in the ratio of 3: 2 with capitals of ₹ 50,000 and ₹ 30,000 respectively. Interest on capital is agreed@6% p. a. B is to be allowed an annual salary of ₹ 2,500. During 2006, the profits of the year prior to calculation of interest on capital but after charging B՚s salary amounted to ₹ 12,500. A provision of 5% of the profits is to be made in respect of Manager՚s commission.
Prepare an account showing the allocation of profits and partners՚ capital accounts.
EditQuestion 19
Describe in Detail Subjective▾
A, B and C were partners in a firm sharing profits equally: Their Balance Sheet on. 31.12. 2007 stood as:
Liabilities | ₹ | Assets | ₹ | ||
A | 30,000 | Goodwill | 18,000 | ||
B | 30,000 | Cash | 38,000 | ||
C | 20,000 | 85,000 | Debtors | 43,000 | |
Bills payable | 20,000 | Less: Bad Debt provision | 3,000 | 40,000 | |
Creditors | 18,000 | Bills Receivable | 25,000 | ||
Workers Compensation Fund | 8,000 | Land and Building | 60,000 | ||
Employees provident Fund | 60,000 | Plant and Machinery | 40,000 | ||
General Reserve | 30,000 | ||||
2,21, 000 | 2,21, 000 |
It was mutually agreed that C will retire from partnership and for this purpose following terms were agreed upon.
i) Goodwill to be valued on 3 years՚ purchase of average profit of last 4 years which were 2004: ₹ 50,000 (loss) ; 2005: ₹ 21,000; 2006: ₹ 52,000; 2007: ₹ 22,000.
ii) The Provision for Doubtful Debt was raised to ₹ 4,000.
iii) To appreciate Land by 15% .
iv) To decrease Plant and Machinery by 10% .
v) Create provision of Rs; 600 on Creditors.
vi) A sum of ₹ 5,000 of Bills Payable was not likely to be claimed.
vii) The continuing partners decided to show the firm՚s capital at 1,00, 000 which would be in their new profit sharing ratio which is 2: 3. Adjustments to be made in cash
Make necessary accounts and prepare the Balance Sheet of the new partners.
EditExplanation
Particulars | ₹ | Particulars | ₹ | |
To Provision for Debts A/c | 1,000 | By Land A/c | 9,000 | |
To Plant & Machinery A/c | 4,000 | By Provision on Creditors A/c | 600 | |
To Profit transferred to | By Bills Payable A/c | 5,000 | ||
A՚s Capital A/c | 3,200 | |||
B՚s Capital A/c | 3,200 | |||
C՚s Capital A/c | 3,200 | 9,600 | ||
14,600 | 14,600 |
… (156 more words) …