Aditi, Bobby and Krish were partners in a firm sharing profits and losses in the ratio of 5:3:2

56 :- Aditi , Bobby and Krish were partners in a firm sharing profits and losses in the ratio of 5:3:2. Their capitals were Rs 500,000, Rs 400,000 and Rs 200,000 respectively. The partnership deed provided for the following;

Interest on capital @10% per annum
Interest on drawings @6% per annum
Interest on partner’s loan to the firm @9% per annum

During the year, Aditi had withdrawn Rs 60,000 and Bobby Rs 50,000. On 1^st September 2021, Krish had given a loan of Rs 40,000 to the firm.

Pass necessary journal entries in the books of the firm for the following transactions for the year ended 31^st March, 2022:

Allowing interest on Bobby’s capital
Charging interest on Aditi’s drawings
Providing interest on Krish’s loan to the firm

Also pass transfer entries in the profit and loss Account / profit and loss appropriation account, as the case maybe.

Solution:-

Question 1 to 5 (Partnership Deed)
Question 6 to 8 (Interest on loan by partner to the firm)
Question 9 – 13 (Interest on Loan to the firm by Partner and Loan by the Firm to Partner)
Question 14 – 19 (Profit & Loss Appropriation Account)
Question 20 – 22 (Fixed Capital)
Question 23 to 25 (Fluctuating capital)
Question 26 (When interest on capital is an appropriation and profits are inadequate)
Question 27 to 31 (Calculation of interest on partners capital)
Question 32 to 35 (Salary or commission to partners)
Question 36 to 41 (Calculation of interest on partners drawings, amount of drawings and rate of interest on drawings)
Question 42 to 46 (Calculation of interest on partners drawings, amount of drawings and rate of interest on drawings)
Question 47 to 50 (Profit and loss appropriation account and partner’s capital account)
Question 51 to 53 (Transfer of profits to reserve)
Question 54 to 55 (Appropriations more than available profits)
Question 56 – (Adjusting and transfer entries)
Question 57 to 61 (Adjustments for incorrect appropriations in the past [past adjustments])
Question 62 to 66 (Adjustments for incorrect appropriations in the past)
Question 67 to 72 (Adjustments for incorrect appropriations in the past)
Question 73 to 75 (Adjustments for incorrect appropriations in the past)
Question 76 to 80 (Guarantee of minimum profit to a partner)
Question 81 to 85 (Guarantee of minimum profit to a partner)
Question 86 to 89 (Guarantee of minimum profits to a partner)
Question 90 – 91 (Minimum earnings guaranteed by a partner)