12th BOOK KEEPING BY AJAYSANTHOSH MOURYA
Fixed and
Fluctuating Capitals:
1. Show how the following items
will appear in the Capital Accounts of the partners, Ramu and Somu, when their
capitals are
(a) Fluctuating and (b) Fixed.
Distribution of Profit:
5. Elavarasan
and Amudharasan are partners with capitals of Rs.1,50,000 and Rs.1,00,000
respectively on 1st
April
2004. The Trading Profit for the year ended 31st March, 2005 was Rs.60,000.
Interest on capital is to be allowed at 6% per annum. Amudharasan entitled to a
salary of Rs.15,000 per annum. Thedrawings of the partners were Elavarasan
Rs.15,000 andAmudharasan Rs.10,000; The interest on drawings are Elavarasan Rs.500
and Amudharasan Rs.250. Assuming that Elavarasan and Amudharasan are equal
partners. Prepare the Profit and Loss Appropriation Account and the Capital
Accounts as on 31st March, 2005.
(Answer: Profit
Rs. 30,750; Capital Accounts: Elavarasan Rs.1,58,875; Amudharasan Rs. 1,26,125)
6. Amuthan and
Raman are partners in a firm showing Profits and Losses in the ratio 3:2. Their
capitals on 1.4.2003 were Rs.1,60,000 and Rs.1,20,000 respectively. The Net
Profit of the firm for the year ended 31st March 2004 before making adjustments for
the above items was Rs.60,000. Drawings of the partners during the year were,
Amuthan Rs.12,000 and Raman Rs.8,000. Their Partnership Deed provided for the
following:
1. Interest on
Capital at 5% p.a.
2. Interest on
Drawings at 6% p.a.
3. Amuthan and
Raman to get a salary of Rs.10,000 each per annum.
4. Amuthan to
get a commission of 10% on the Net Profit before charging such commission.
Show the Profit
and Loss Appropriation Account and Capital Accounts of the partners.
(Answer: a) Net
Profit Rs. 23,940;b) Capital Accounts: Amuthan : Rs. 1,82,664;Raman : Rs.
1,37,336)
Note: In the absence
of actual date of Drawings, Interest on them has to be calculated for an
average period of 6 months.
7. Cheran,
Pallavan are partners with capitals of Rs.60,000 and Rs.20,000 respectively on
1st January 2001. The Trading Profit (before taking into account the provision
of the Deed) for the year ended 31st December, 2001 was Rs.12,000. Interest on
capitalis to be allowed at 6% per annum. Pallavan is entitled to a salary of
Rs.3,000 per annum. The drawings of the partners were Cheran Rs.2,000 and
Pallavan Rs.1,000; the interest on drawings for Cheran being Rs.100 and for
Pallavan Rs.50. Assuming that Cheran, Pallavan are equal partners, prepare the
Profit and Loss Appropriation Account and the partners’ Capital Account (The
capitals are fluctuating as at 31st December,2001).
(June
2002)
(Answer:
a) Net Profit Rs. 4350;
b)
Capital Accounts: Cheran : Rs. 66,625;
Pallavan
: Rs. 22,325)
Interest on Capital:
8. Manjula and
Vennila started business on 1st April 2004 with capitals of Rs.60,000 and Rs. 50,000
respectively. On 1st
July
2004 Manjula withdrew Rs.8,000 from his capital. Vennila introduced additional
capital Rs.10,000 on 30.9.2004. Calculate interest on capital at 5% for the
year ending 31st March 2005.
(Answer:
Interest on capital; Manjula : Rs. 2,700;Vennila : Rs. 2,750)
9. Prince, Queen
and King had capitals of Rs. 80,000, Rs.60,000 and Rs.40,000 respectively on
1.4.2004. Queen withdrew Rs.8,000 from his capital on 30.9.2004, King
introduced additional capital Rs. 12,000 on 31.12.2004. Calculate interest on
capital at 6% for the year ending 31st March 2005.
(Answer:
Interest on capital; Prince : Rs. 4,800;Queen : Rs. 3,360; King : Rs.2,580)
10. X and Y had
capitals of Rs.80,000 and Rs.40,000 respectively on 1.1.2000. X introduced
additional capital of Rs.10,000, on 30.6.2000. Y withdrew Rs.5,000 from his
capital on 1.10.2000. Calculate interest on capital at 5% for the year 2000. (October 2002)
(Answer:
Interest on capital; X : Rs. 4,250; Y : Rs. 1,937.50)
Interest on Drawings:
11. Sundar and
Shanmugam are two partners sharing profits and losses equally. Sundar drew
regularly Rs.2,000 at the end of every month during the year. Shanmugam draws
Rs.4,000 regularly at the beginning of every month during the year. Calculate
interest on their drawings at 10% p.a.
(Answer:
Interest on drawings;Sundar : Rs. 1,100; Shanmugam :Rs.2,600)
12. Pasupathi
and Valayapathi are partners. Pasupathi draws Rs.900 regularly in the middle of
each month during the year 2004. Valayapathi draws Rs.5,400 at the end of each
half year. Calculate interest on their drawings at 5% p.a.
(Answer:
Interest on drawings;Pasupathi : Rs.270; Valayapathi : Rs.135)
13. Matheswaran
and Nagarajan are partners sharing profits in the ratio of 3:2. Matheswaran
draws Rs.3,000 regularly at the end of every month during the year 2004.
Nagarajan draws Rs.10,000 on 1.4.2004, Rs.6,000 on 30.6.2004, Rs.8,000 on
1.10.2004 and Rs.4,000 on 30.11.2004. Calculate interest on their Drawings at
6% p.a.
(Answer:
Interest on drawings;Matheswaran : Rs. 990; Nagarajan : Rs. 770)
14. Hari and
Karthi are two partners sharing profits and losses equally. Hari drew regularly
Rs.400 at the end of every month during theyear. Karthi drew Rs.800 regularly
at the beginning of every month during the year. Calculate interest on their
drawings at 10% p.a. (March 2003)
(Answer:
Interest on drawings;Hari : Rs. 220; Karthi : Rs. 520)
Valuation of Goodwill:
15. Goodwill is
to be valued at three years purchase of five year’saverage profits. The profits
for the last five years of the firm were:
2003 - Rs. 4,600
and 2004 - Rs. 5,000.
(Ans. : Goodwill Rs.
13,800)
16. Calculate
the amount of goodwill on the basis of two year’s purchase of the last four
years average profits. The profits for the last four years are:
I Year Loss Rs. 10,000
II Year Profit Rs. 26,000
III Year Profit Rs. 34,000
IV Year Profit Rs. 50,000
(Ans. : Goodwill
Rs. 50,000)
17. Goodwill is
to be valued at three years purchase of four years average profits. The profits
for the last four years of the firm were:
2001 - Rs.
12,000; 2002 - Rs. 18,000; 2003 - Rs. 16,000;2004 - Rs. 14,000.
Calculate the
amount of goodwill.
(Ans. : Goodwill
Rs. 45,000)
18. G, P, S were
partners of a firm sharing profit and losses in the ratio 3:2:1. In view of G’s
retirement, goodwill was valued at twoyears’ purchase of the average profits of
last 4 years which are:
Ist year’s Loss Rs. 6,000
IInd year’s
Profit Rs. 10,000
IIIrd year’s
Profit Rs. 17,000
IVth year’s
Profit Rs. 15,000
What entry would
you pass to carry out their decision? (October
2002)
(Ans. : Goodwill
Rs. 18,000)
19. Calculate
the amount of goodwill on the basis of two years’ purchase of the last four
years’ average profits. The profits of the last four years are
1996 Profit Rs. 20,000
1997 Profit Rs. 30,000
1998 Loss Rs. 6,000
1999 Profit Rs. 16,000 (June
2003)
(Ans. : Goodwill
Rs. 30,000)
20. A firm
earned net profits during the last three years as follows:
I Year Rs. 36,000
II Year Rs. 40,000
III Year Rs. 44,000
The Capital
investment of the firm is Rs.1,20,000. A fair return on the capital having
regard to the risk involved is 10%. Calculate the value of goodwill on the
basis of three years
purchase of
Super profits.
(Ans. : Goodwill
Rs. 84,000)
21. From the
following information, calculate the value of goodwill at three years’ purchase
of super profit.
i) Average
Capital employed in the business Rs.6,00,000.
ii) Net trading
profits of the firm for the past three years were Rs.1,07,600, Rs.90,700 and Rs.1,12,500.
iii) Rate of
interest expected from capital having to the risk involved is 12%.
iv) Fair
remuneration to the partners for their service Rs.12,000 p.a.
(Ans. : Goodwill
Rs. 58,800)
22. The average
net profits of the firm expected in the future are Rs.54,000 per year. The
average capital employed in the business is Rs.3,00,000. The rate of interest
expected from capital invested in the business is 10%. The remuneration of the
partners is estimated to be Rs.9000 per annum.Find out the value of goodwill on
the basis of two years purchase of Super Profits.
(Ans. : Goodwill Rs.
30,000)
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