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Question

Rakesh and Roshan are partners, sharing profits in the ratio of 3 : 2 with capitals of Rs 40,000 and Rs 30,000, respectively. They withdrew from the firm the following amounts, for their personal use

RakeshMonthAmt. (Rs)May 31, 2006600June 30, 2006500August 31, 20061,000November 1, 2006400December 31, 20061,500January 31, 2007300March 1, 2007700RohanAt the beginning of each month400

Interest is to be charged @ 6% pa. Calculate interest on drawings, assuming that book of accounts are closed on March 31, 2007, every year.

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Solution

DateAmt.(Rs)PeriodProductMay 31, 200660010 months6,000June 30, 20065009 months4,500August 31, 20061,0007 months7,000November 1, 20064005 months2,000December 31,20061,5003 months4,500January 31, 20073002 months600March 01, 20077001 months700Total¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯25,300––––––––––––

Interest on Drawings of Rakesh

Sum of product ×Rate×112=25,300×6100×112=Rs 126.50

Interest on Rohan's Drawings (By Average Method)

Total Drawings ×Rate×61212=4,800×6100×132×12=Rs 156


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Q.

Kajol and Sunny were partners sharing profits and losses in the ratio of 3:2. The following Balances were extracted from the books of account for the year ended March 31, 2006.

Account NameAmt. (Dr)Amt. (Cr)Capital Kajol115,000 Sunny91,000Current Accounts (on 1-04-2005) Kajol4,500 Sunny3,200Drawings Kajol6,000 Sunny3,000Opening Stock22,700Purchase and Sales1,65,0002,35,800Freight Inward1,200Returns2,0003,200

Account NameAmt. (Dr)Amt. (Cr)Printing and Stationery900Wages5,500Bills Receivables and Bills25,00021,000PayablesDiscount400800Salaries6,000Rent7,200Insurance Premium2,000Travelling Expenses700Soundry Expenses1,100Commission1,600Debtors and Creditors74,00078,000Building85,000Plant and Machinery70,000Motor Car60,000Furniture and Fixtures15,000Bad Debts1,500Provision for Doubtful Debts2,200Loan25,000Legal Expenses300Audit Fee900Cash in Hand7,500Cash at Bank12,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯5,78,100––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯5,78,100––––––––

Prepare final accounts for the year ended March 31, 2006, with following adjustments

(a) Stock on March 31, 2006 was Rs 37,500.

(b) Bad debts Rs 3,000; Provision for bad debts is to be made at 5% on debtors.

(c) Rent prepaid were Rs 1,200.

(d) Wages outstanding were Rs 2,200.

(e) Interest on capital to be allowed on capital at 6% per annum and interest on drawings to be charged @ 5% per annum.

(f) Kajol is entitled to a Salary of Rs 1,500 per annum.

(g) Prepaid insurance was Rs 500.

(h) Depreciation was charged on Building, @ 4%; Plant and Machinery @5% Motor car, @10% and Furnniture and Fixture, @ 5%.

(i) Goods worth Rs 7,000 were destroyed by fire on January 20, 2005. Insurance company agreed to pay Rs 5,000 in full settlement of the case.

Q.

Dinker and Ravinder were partners sharing profits and losses in the ratio of 2:1. The following balances were extracted from the books of account, for the year ended December 31, 2005.

Account NameAmt. (Dr)Amt. (Cr)Capital Dinker2,35,000 Ravinder1,63,000Drawings Dinker6,000 Ravinder5,000Opening Stock35,100Purchase and Sales2,85,0003,75,800

Account NameAmt. (Dr)Amt. (Cr)Carriage Inward2,200Returns3,0002,200Stationery1,200Wages12,500Bills Receivables and Bills45,00032,000PayablesDiscount900400Salaries12,000Rent and Taxes18,000Insurance Premium2,400Postage300Sundry Expenses1,100Commission3,200Debtors and Creditors95,00040,000Building1,20,000Plant and Machinery80,000Investments1,00,000Furniture and Fixture26,000Bad Debts2,000Bad Debts Provision4,600Loan35,000Legal Expenses200Audit Fee1,800Cash in Hand13,500Cash at Bank23,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯8,91,200––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯8,91,200––––––––

Prepare final accounts for the year ended December 31, 2005, with following adjustment

(a) Stock on December 31, 2005 was Rs 42,500.

(b) A Provision is to be made for bad debts at 5% on debtors.

(c) Rent outstanding was Rs 1,600.

(d) Wages outstanding were Rs 1,200.

(e) Interest on capital to be allowed on capital @ 4% per annum and interest on drawings to be on charged @6% per annum.

(f) Dinker and Ravinder are entitled to a Salary of Rs 2,000 per annum.

(g) Ravinder is entitled to a commission Rs 1,500.

(h) Depreciation is to be charged on Building @ 4%, Plant and Machinery, 6%, and furniture and fixture, 5%.

(i) Outstanding interest on loan amounted to Rs 350.

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