Anita and Tony, each doing business as sole proprietors, started a partnership on
1st April, 2018. Anita brought in Plant and Machinery valued at 5,00,000 whereas
Tony brought in furniture costing * 50,000 and 7,00,000 in cash.
Since the business needed more funds, Tony gave a loan of 2,00,000 to the firm on
30th June, 2018
Their partnership deed provided for:
(a) Interest on capital to be allowed @10% per annum.
(b) Interest on drawings to be charged @ 6% per annum.
(c) Anita to be given a commission of 4% on the corrected net profits before
charging commission.
(d) Tony to be given a salary of 12,000 per annum.
Tony withdrew * 5,000 at the end of every month and Anita withdrew * 30,000
on 1st August, 2018.
The net profit of the firm, for the year 2018-19, after debiting Tony's salary of
* 12,000 per annum but before considering any interest due to and due from the
partners, was * 4,00,000.
You are required to prepare for the year 2018-19:
Profit and Loss Appropriation Account.
(ii) Partners' Capital Accounts.
Answers
Answer:
Quick-Print Limited is a clothing manufacturing company that specializes in producing commemorative shirts immediately following major sporting events like the World Cup, Asian Games etc. The company has been contracted to produce garments for the winning cricket team in the coming World Cup.
The items produced include two types of sweatshirts, one with silk screen printing on the front (F) and one with print on both back and front sides (B/F), and two types of T-shirts of the same configuration (F and B/F).
The company has to complete all production within 48 hours after the game, at which time a trailer truck will pick up the shirts. The company will work around the clock. The truck has enough capacity to accommodate 1,400 standard-size boxes. A standard-size box holds 12 garments. The company has budgeted Rs. 125,000 for the production run.
The resource requirements, unit costs, and profit for each type of shirt are shown in the following table.
Processing Time (hr)
Cost (Rs)
Profit (Rs)
Sweatshirt–F
0.22
36
90
Sweatshirt–B/F
0.36
48
126
T-shirt–F
0.06
26
44
T-shirt–B/F
0.32
38
62
The company wants to know how many units of each type of shirt to produce in order to maximize the total profit.
Formulate the above problem as a Linear Program.
NOTE: Clearly define the variables and label each constraint.
Net Profit before charging commission = Net Profit as per Profit and Loss A/c - Tony's salary
= 4,00,000 - 12,000
= 3,88,000
Corrected Net Profit before charging commission = Net Profit before charging commission + Interest on drawings charged
= 3,88,000 + (Anita's drawings x 6% for 8 months) + (Tony's drawings x 6% for 12 months) - (Tony's loan x 10% for 9 months)
= 3,88,000 + (30,000 x 6% x 8) + (5,000 x 6% x 12) - (2,00,000 x 10% x 9/12)
= 4,19,360
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