lustration 23. Ramesh and Naresh are partners in a firm. Their capitals as were 2,50,000 and 1,50,000 respectively. They share profits equally. On ecided that their capitals should be 2,00,000 each. The necessary adjustm were made by introducing or withdrawing cash. Interest on capital is a ompute interest on capital for both the partners for the year ended 31st M

lustration 23. Ramesh and Naresh are partners in a firm. Their capitals as were 2,50,000 and 1,50,000 respectively. They share profits equally. On ecided that their capitals should be 2,00,000 each. The necessary adjustm were made by introducing or withdrawing cash. Interest on capital is a ompute interest on capital for both the partners for the year ended 31st M

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sunflower and Pink Rose started partnership business on April 01, 2016 with capitals of Rs. 2,50,000 and Rs.1,50,000, respectively. On October 01, 2016, they decided that their capitals should be Rs. 2,00,000 each. The necessary adjustments in the capitals are made by introducing or withdrawing cash.Interest on capital is to be allowed @ 10% p.a. Calculate interest on capital as on March 31, 2017.
A and B are two partners. Theyagreed to allow interest on capital@5% per annum. Capital accountsas 1.4.16 were A 20,000 RS and B15,000 rsA introduced further capital of rs5000 on 1.10.16 and B introduced rs3000 on 1.10.16Calculate interest on Capital of eachPartner as 31.3.17 Please avoid solutions in image thnku
Saloni and Srishti are partners in a firm. Their capital accounts as onApril 01. 2016 showed a balance of Rs. 2,00,000 and Rs. 3,00,000respectively. On July 01, 2016, Saloni introduced additional capital ofRs. 50,000 and Srishti, Rs. 60,000. On October 01 Saloni withdrew Rs.30,000, and on January 01, 2016 Srishti withdraw, Rs. 15,000 from theircapitals. Interest is allowed @ 8% p.a. Calculate interest payable on capitalto both the partners during the financial year 2016–2017.
From the following particulars of partners David and John who were Sharing profits in the Ratio of 2:3, prepare Capital Accounts: David John Capital on 1 Jan 2011 $50,000 $ 500 per month (Drawn on 1 st day of (Drawn on last day of the every month) $70,000 $700 per month Drawings the every month) Interest on Loan $ 5,000 $8,000 Interest on Capital @ 5%p.a ? Interest on Drawings @8%p.a ? ? Profit share of 2011 $ 30,000 $ 35,000
A and B are partners' sharing profit and loss equally. Their capitals as on 1.1.2012 were $90,000 and $ 60,000 respectively. They decided to allow interest on capitals @ 10% p.a. The profits for the year 2012 were $ 10,000. Prepare related accounts to allocate interest on capitals, in each of the following case (a) Interest on capital is an appropriation of profits.
Mohit, Neeraj and Sohan are partners in a firm sharing profits in the ratioof 2 : 1 : 1. Neeraj retires and Mohit and Sohan decided that the capital ofthe new firm will be fixed at Rs. 1,20,000. The capital accounts of Mohit and Sohan show a credit balance of Rs. 82,000 and Rs. 41,000 respectively after making all the adjustments. Calculate the actual cash to be paid off or to be brought in by the continuing partners and pass the necessary journal entries.
Reena and Raman are partners with capitals of Rs. 3,00,000 and Rs. 1,00,000 respectively. The profit (as per Profit and Loss Account) for the year ended March 31, 2017 was Rs. 1,20,000. Interest on capital is to be allowed at 6% p.a. Raman was entitled to a salary of Rs. 30,000 p.a. The drawings of partners were Rs. 30,000 and 20,000. The interest on drawings to be charged to Reena was Rs. 1,000 and to Raman, Rs. 500.Assuming that Reena and Raman are equal partners. State their share ofprofit after necessary appropriations.
3. Bunag, Belen, and Bustos are partners in an accounting firm. Their capital account balances at year-end were P180,000, P220,000, and P100,000, respectively. They share profits and losses on a 4:4:2, ratio respectively, after considering the following terms: a. Bustos is to receive a bonus of 10% of profit after deducting bonus b. Interest of 10% shall be paid on that portion of a partner’s capital in excessof P200,000. c. Salaries of P20,000 and P24,000 shall be paid to partners Bunag and Bustos,respectively. Assuming a profit of P220,000 for the year. REQUIRED: Prepare the following:A. Profit or Loss Distribution TableB. Corresponding JOURNAL ENTRY to distribute profit or loss
2. Rene, Michael, and Kevin are partners in an accounting firm. Their capital accountbalance at year-end were Rene, P90,000; Michael, P120,000; and Kevin,P160,000. They share profit and losses on a 4:4:2 ratio after considering thefollowing terms: a. Kevin is to receive a bonus of 10% of net income. b. Interest of 5% shall be paid on partner’s capital. c. Salaries of P8,000 and P10,000 shall be paid to partners Rene and Kevinrespectively. Assuming a net income of P84,000 for the year. REQUIRED: Prepare the following:A. Profit or Loss Distribution TableB. Corresponding JOURNAL ENTRY to distribute profit or loss
The capital accounts of Moli and Golu showed balances of Rs.40,000 andRs. 20,000 as on April 01, 2016. They shared profits in the ratio of 3:2. Theyallowed interest on capital @ 10% p.a. and interest on drawings, @ 12 p.a. Golu advanced a loan of Rs. 10,000 to the firm on August 01, 2016.During the year, Moli withdrew Rs. 1,000 per month at the beginning of every month whereas Golu withdrew Rs. 1,000 per month at the end of every month. Profit for the year, before the above mentioned adjustments was Rs.20,950. Calculate intereston drawings show distribution of profits and prepare partner’s capital accounts.
Lokesh and Azad are partners sharing profits in the ratio 3:2, with capitals ofRs. 50,000 and 30,000, respectively. Interest on capital is agreed to be paid @ 6% p.a. Azad is allowed a salary of Rs. 2,500 p.a. During 2016, the profitsprior to the calculation of interest on capital but after charging Azad’s salaryamounted to Rs. 12,500. A provision of 5% of profits is to be made in respect of manager’s commission. Prepare accounts showing the allocation of profits and partner’s capital accounts.
Krishna, Sandeep and Karim are partners sharing profits in the ratio of 3:2:1. Their fixed capitals are: Krishan Rs. 1,20,000, Sandeep 90,000 and Karim 60,000. For the year 2014-15, interest was credited to them @ 6% p.a. instead of 5% p.a. Record adjustment entry.