Arun and Arora were partners in a firm sharing profits in the ratio of 5:3. Their fixed capitals on 1-4-2010 were: Arun Rs 60,000 and Arora Rs 80,000. They agreed to allow interest on capital @ 12% p.a. And to charge on drawings @ 15% p.a. The profit of the firm for the year ended 31-3 2011 before all above adjustments were Rs 12,600. The drawings made by Arun were Rs 2,000 and by Arora Rs 4,000 during the year. Prepare Profit and Loss Appropriation Account of Arun and Arora. Show your calculations clearly. The interest on capital will be allowed even if the firm incurs loss.
Profit and Loss Appropriation Account:
Particulars |
Amount (Rs) |
Particulars |
Amount(Rs) |
Interest on Capital Arun Arora
|
7200 9600
|
Net Profit Interest on Drawings Arun: 150 Arora: 300 Loss transferred to partners current a/c Arun: Rs 2344 Arora: Rs 1406
|
12,600
450
3750 |
|
16800 |
|
16800 |
Working note:
Interest on capital
Arun : (60000*12/100)= 7200
Arora: (80000*12/100) = 9600
Interest on drawings:
Arun: (2000*15/100)*6/12= 150
Arora: (4000*15%)*6/12= 300
Loss transferred to partners current a/c
Arun (3750*5/8) Rs 2344
Arora(3750*3/8) Rs 1406
From the following information, calculate the amount of income from subscriptions to be shown in the Income and Expenditure Account for the year ended 31-3-2011:
Subscriptions received during the year 2010-2011 |
Rs |
3,40,000 |
Subscriptions outstanding as on 31-3-2011 |
Rs |
47,000 |
Subscriptions received in advance as on 31-3-2011 |
Rs |
35,000 |
Subscriptions outstanding as on 1-4-2010 |
Rs |
28,000 |
Subscriptions received in advance as on 1-4-2010 |
Rs |
25,000 |
Narain Laxmi Ltd. invited applications for issuing 7500, 12% Debentures of Rs100 each at a premium of Rs 35 per Debenture. The full amount was payable on application.
Applications were received for 10,000 Debentures. Applications for 2500 Debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.
Pass necessary Journal Entries for the above transactions in the books of Narain Laxmi Ltd.
Jain Ltd. purchased Building for Rs 10,00,000 from Gupta Ltd. 10% of the payable amount was paid by a cheque drawn in favour of Gupta Ltd. The balance was paid by issue of Equity Shares of Rs 10 each at a discount of 10%.
Pass necessary Journal Entries in the books of Jain Ltd.
Arjun, Bhim and Nakul are partners sharing profits & losses in the ratio of 14:5:6 respectively.
Bhim retires and surrenders his 5/25th share in favour of Arjun. The goodwill of the firm is valued at 2 years purchase of super profits based on average profits of last 3 years. The profits for the last 3 years are Rs 50,000, Rs 55,000 & Rs 60,000 respectively. The normal profits for the similar firm are Rs 30,000. Goodwill already appears in the books of the firm at Rs 75,000.
The profit for the first year after Bhim's retirement was Rs 1,00,000. Give the necessary Journal Entries to adjust Goodwill and distribute profits showing your workings.
State the provisions of Indian Partnership Act regarding the payment of remuneration to a partner for the services rendered.