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Q.

Following are the annual accounts of partnership firm of Dharm and Karm:

Profit and loss A/c of Partnership firm of Dharm and Karm as on 31-3-2023

Dr. ParticularsAmt.(₹)Cr. ParticularsAmt.(₹)
To Cost of goods sold A/c1,16,000By Sales A/c1,96,000
To Office expenses A/c20,000By Sundry Income A/c2,000
To Sales expenses A/c16,000
To Financial expenses A/c4,000
To Sundry expenses A/c4,000
To Partners' Capital A/c (Net profit): Dharm 22,800; Karm 15,20038,000
1,98,0001,98,000

Balance-Sheet of partnership firm of Dharm and Karm as on 31-3-2023:

Capital-LiabilitiesAmt.(₹)Assets-DebtsAmt.(₹)
Capital: Dharm 40,000 + Net profit 22,800 = 62,800 − Drawings 12,00050,800Non current Assets: Tangible assets: Fixed assets60,000
Karm 30,000 + Net profit 15,200 = 45,200 − Drawings 6,00039,200Investments12,000
Liabilities8,000Current assets (with debtors)28,000
Suspense A/c2,000
1,00,0001,00,000

After preparation of annual accounts, the following adjustments are reported:

(1) 5% interest on capital is not calculated.

(2) 10% depreciation on fixed assets is to be provided.

(3) Prepaid rent is ₹ 200.

(4) Interest on investment is not received ₹ 400 and maintain bad-debts reserve of ₹ 600.

(5) Total of sales book is under cost by ₹ 2000.

(6) Purchase of ₹ 800 is not recorded in the books.

Prepare revised final accounts from the above information.

Gujarat GsebGujarat Board (GSEB) HSC Commerce Board 2024Subjective· 11mImportance★★★★★
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Revised profit Rs 33,200; interest on capital Rs 3,500; divisible profit Rs 29,700 in 3:2; Balance-Sheet total Rs 94,000.

Profit-sharing ratio (from original profit 22,800 : 15,200) = 3 : 2.

Statement of revised net profit (starting from reported profit Rs 38,000):

ParticularsRs
Reported net profit38,000
Add: Sales book undercast (corrects Suspense Rs 2,000)2,000
Add: Interest accrued on investment400
Add: Prepaid rent200
Less: Unrecorded purchase (added to cost of goods sold)(800)
Less: Depreciation @10% on fixed assets (60,000 x 10%)(6,000)
Less: Bad-debts reserve(600)
Revised net profit (before interest on capital)33,200

Appropriation (interest on capital @5% on opening capital): Dharm 40,000 x 5% = 2,000; Karm 30,000 x 5% = 1,500; total 3,500. Divisible profit = 33,200 - 3,500 = Rs 29,700 -> Dharm 3/5 = 17,820; Karm 2/5 = 11,880.

Partners' Capital Accounts:

ParticularsDharmKarmParticularsDharmKarm
To Drawings12,0006,000By Balance b/d40,00030,000
To Balance c/d47,82037,380By Interest on capital2,0001,500
By Profit share (3:2)17,82011,880
59,82043,38059,82043,380

Revised Balance-Sheet as on 31-3-2023:

| Liabilities | Rs | Assets | Rs |

|---|---|---|---| …

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