Question

2.132
ACCOUNTING FOR PARTNERSHIP FIRMS – FUNDAMENTALS
Q. 69 (B). X, Y and Z are partners with capitals of 34,00,000; 53,00,000 and
32,00,000 respectively. They charge 8% p.a. interest on their capitals and divide the
profits in the ratio of 3 : 2:1. X has guaranteed that Z's share shall not amount to less
than 50,000 in any one year.
Their Drawings during the year were $50,000; 340,000 and 335,000 respectively.
Net profits for the year before providing interest on capitals was 2,52,000. Prepare
P & L Appropriation A/c and capital accounts.
[Ans. Profits X *70,000; Y 360,000; Z 350,000.]​

Answer 1

Answer:

ANSWER:

(a) P is bound to pay Rs 20,000 together with profit of Rs 5,000 to the firm because this amount belongs to the firm.

Explanation: As per Principal and Agent relationship, P is principal as well as agent to the firm and to Q and R. As per this rule, any profit earned by an agent (P) by using the firm’s property is attributable to the firm.

(b) Q is liable to pay Rs 5,000 to the firm. As per the Partnership Act, 1932, every partner of a partnership firm is liable to the firm for any loss caused by his/her willful negligence.

Explanation: Here Q is solely responsible for the loss of Rs 1,000 because he used the property of the firm and also represented himself as a principal rather than an agent to the other partners and to the firm.

(c) P and Q may buy goods from A Ltd.

Explanation: As per Partnership Act, 1932, a partner has a right to buy and sell goods without consulting the other partners unless a Public Notice has been given by the partnership firm to restrict the partners to buy and sell.

(d) C will not be admitted because one of the partners P has not agreed to admit C.

Explanation: As per Partnership Act, a new partner cannot be admitted into a firm unless all the existing partners agree on the same decision. In other words, a new partner can be admitted in a partnership firm with the consent of all the existing partners.

Explanation:

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Answer 2

Answer:Answer:X’s IOC = 400000x8%=32000

Y’s IOC =300000x8%=24000

Z’s IOC = 200000x8%=16000

PROFIT SHARE

X’s profit share = 180000x3/6=90000-20000=70000

Y’s share =180000x2/6=60000

Z’s share =180000x1/6=30000+20000=50000

Explanation:X’s profit share was 90000 but he has guranteed to Z’s share amount shall not be less less than 50000 but the profit of share given to Z’s is 30000 that’s why 20000 amount is deducted from X’s and added to Z’s account

……

Explanation: