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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 1101. |
Provision for Tax appears in a Company's Balance Sheet under the Sub-head............. |
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Answer» Short-term Provisions |
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| 1102. |
propritary ratio of a company is 0.7:1 state whether long term loan obtained by the company will improve decrease or not change the ratio. |
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| 1103. |
ProprietaryRatio is: |
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Answer» LONG TERM Debts/Shareholder's Funds |
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| 1104. |
Proprietary Ratio indicates the relationship between Proprietor's Funds and ……………. |
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Answer» Long-Term DEBTS |
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| 1105. |
profitearnedbya partnership firm for theyearended31stMarch2018weredistributed equallybetweenthepartners -Pankaj and anu -withoutallowinginteresto capitalinterestdueon capitalwas pankajRs. 3,000 and anu -Rs. 1,000 Pass nencessaryy adjstmententry . |
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| 1106. |
Priya, Karam and Anna were partners of a firm sharing profits in the ratio of 3:2:1. Their Balance Sheet on 31st march, 2014 was as follows: Karam died on 12th June, 2014 and according to the Partnership Deed his executors were entitled to be paid as under: (i) His share in the profits of the firm till the date of his death which will be calculated on the basis of average profits of last three completed years. (ii) His share in the goodwill of the firm which will be calculated on the basis of two years' purchase of total profits of last three years. (iii) Profits for the last three years were: Rs 30,000, Rs 70,000 and Rs 80,000. Prepare Karam's Capital A/c to be rendered to his executors. |
Answer» SOLUTION : 1. KARAM's Share of Profit till the date of death: Average Profit of LAST three years `=(RS30.000+Rs 7,000 + Rs 80,000)/(3)=Rs 60,000` Karam's Share of Profit `=Rs 60,000xx73/365xx2/6=Rs4,000.` 2. Karam's Share of Goodwill: Total Profits of last three years = Rs 30,000 + Rs 70,000 + Rs 80,000 = Rs 1,80,000 Firm's Goodwill `=Rs1,80,000xx2=Rs3,60,000` Karam's Share of Goodwill `=Rs6,60,000xx2/6=Rs1,20,000,` which is contributed by Priya and Anna in their Gaining Ratio of `3:1` Thus Priys's Contribution `=Rs 1,20,00xx3/4=Rsx 90,000,` Anna's Contribution `=Rs1,20,000cc1/4=Rs30,000.` 3. In the absence of any information, Karam's LONE and Interest thereon have been transferred (credited) to his Capital Account. |
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| 1107. |
Priya and Kajal are partners in a firm, sharing profits and losses in the ratio of 5:3. The balance in their fixed capital accounts, on April 1, 2016 were: Priya, Rs. 6,00,000 and Kajal, Rs. 8,00,000. The profit of the firm for the year ended 2017 is Rs, 1,26,000. Calculate their shares of profits: (a) when there is no agreement in respect of interest on capital, and (b) when there is an agreement that the interest on capital will be allowed@ 12%p.a. |
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Answer» Solution : (a) PROFIT : Priya, RS. 78,750, Kajal, Rs. 47,250 (B) Profit NIL. INTEREST on CAPITAL: Priya, Rs. 54.000, Kajal, Rs. 72,000 |
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| 1108. |
Priya Ltd. Issued 30,000, 8% debentures of Rs.200 each on August 1, 2011 redeemable as follows : "On 31st March, 20156,000 Debentures" "On 31st March, 20167,000 Debentures""On 31st March, 20177,000 Debentures""On 31st March, 201810,000 Debentures"It was decided to transfer Rs.4,00,000 to Debenture Redemption Reserve on March 31, 2012 and March 31, 2013 and balance required to be transferred to Debenture Redemption Reserve on March 31, 2014. Record necessary journal entries. Ignore entries for payment of interest. |
| Answer» Solution :INVESTMENT made for Rs.1,80,000 on 30th April, 2014, Rs.30,000 on 30th April 2015 and Rs.90,000 on 30th April 2017 and entire amount of Investment Rs.3,00,000 encashed on 31st MARCH, 2018. Amount transferred to DEBENTURE Redemption Reserve on March 31, 2014 Rs.7,00,000, DRR transferred to General Reserve on 31st March 2015 Rs.3,00,000, On 31st March 2016 Rs.3,50,000, On 31st March 2017 Rs.3,50,000,and On 31st March 2018 Rs.5,00,000. | |
| 1109. |
Prithvi is admitted to the partnership and he was to bring RS. 50,000 as goodwill. But, he is not in a position to do so. The Accountant passed an entry in the books of account debiting Goodwill Account and crediting Sacrificing Partners' Capital Accounts. Do you think, he passed the entry correctly? Give reasons for your reply. |
| Answer» SOLUTION :The Accountant has not passed the entry correctly as it is not in accordance with Accounting Standard-26. As-26 requires that Goodwill should be accounted in the BOOKS of account only if money or money's worth has been PAID for it. Thus he should PASS ANOTHER another entry to write off goodwill by debiting Prithvi's Capital or Current Account. | |
| 1110. |
Priya and Rani were partners in a firm sharing profits and losses in the ratio of 2 : 1. With effect from 1st April, 2019, they agreed to share the profits equally. They prepared a Revaluation Account on this date and an unrecorded asset(Motorbike) worth Rs. 40,000 was found not to have been recorded in the books. Priya was of the view that it should be Credited to Revaluation Account whereas Rani was of the view that it should be Credited to the Capital accounts in equal proportion. Rani agreed to the viewpoint of Priya. Explain what argument must have been put forward by Priya to which Rani agreed ? |
| Answer» Solution :Priya wouldhave given the argument that unrecorded ASSETS belonged to the old firm when the profit sharing ratiowas 2 : 1. HENCE it should be CREDITED to Revaluation ACCOUNT so that the profit on account of this ASSET could be shared in 2 : 1. | |
| 1111. |
Prepare Income and Expenditure Account and Balance Sheet for the year ended March 31, 2015 from the following information. Receipt and Payment Account for the year ending March 31, 2015 The following additional information is provided to you: 1. There are 1800 members each paying an annual subscription of Rs. 200, Rs. 8,000 were in arrears for 2013-14 as on April 1, 2014. 2. On March 31, 2015 the rates were prepaid to June 2015, the charge paid every year being Rs. 24,000. 3. There was an outstanding telephone bill for Rs. 1,400 on March 31, 2015. 4. Outstanding sundry expenses as on March 31, 2014 totaled Rs. 2,800. 5. Stock of stationery as on March 31, 2014 was Rs. 2000, on March 31, 2015, it was Rs. 3,600. 6. On March 31, 2014 Building stood at Rs. 4,00,000 and it was subject to depreciation @ 2.5% p. a. 7. Investment on March 31, 2014 stood at Rs. 8,00,000. 8. On March 31, 2015, income accrued on investments purchased during the year amounted to Rs. 1,500. |
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Answer» Solution :Income and Expenditure Account for the year ENDING on March 31, 2015  Balance Sheet as on March 31, 2015  Balance Sheet as on March 31, 2014  WORKING Note : SUBSCRIPTION Account 
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| 1112. |
Prepare Note to Accounts for Change in Inventories of Bakers Ltd. For the year ended 31st March, 2019 from the following information and determine the amount that will be shown in the Statement of Profit and Loss against Changes in Inventories of Finished Goods, WIP and Stock-in-Trade: |
Answer»  Rs 50,000 will be shown in the STATEMENT of Profit and LOSS against Changes in INVENTORIES of FINISHED GOODS, Work-in-Progress and Stock-in-Trade. |
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| 1113. |
Prepare Income and Expenditure Account of Entertainment Club for the year ending March 31, 2017 and Balance Sheet as on that date from the following information: Receipt and Payment Account For the year ending on March 31, 2017 Additional Information: |
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Answer» Solution :Books of Entertainment CLUB INCOME and Expenditure Account for the year ending March 31, 2017  BALANCE Sheet of Entertainment Club as on March 31, 2016  Balance Sheet of Entertainment as on March 31, 2017  Note: * Interest on Prize Fund Investments @ 5% amounts to Rs. 3,000 whereas only Rs. 1,500 have been received, so the balance is treated as Accrued interest. It is preferable to prepare separate accounts of various items involving many transactions. In this case Account for Subscription, Miscellaneous EXPENSES, and Sports Materials may be made as a CLASSROOM activity |
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| 1114. |
Prepare Income and Expenditure Account and Balance Sheet for the year ended March 31, 2016 from the following Receipt and Payment Account and Balance Sheet of culture club: Receipt and Payment Account for the year ending March 31, 2016 Balance Sheet for the year ending March 31, 2016 |
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| 1115. |
Prepare 'Comparative Statement of profit and Loss' from the following information: |
Answer» Solution :COMPARATIVE STATEMENT OF PROFIT AND LOSSfor the years ended 31ST MARCH, 2015 and 2016
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| 1116. |
Prepare 'Comparative Statement of Profit and Loss' from the following information: |
Answer» SOLUTION :
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| 1117. |
Prepare Comparative Statement of Profit and Loss from the following information: |
Answer» SOLUTION :
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| 1118. |
Prepare Comparative Statement of Profit and Loss from the following information. |
Answer» SOLUTION : NOTE: Purchases of materials is already included in Cost of MATERIAL Consumed. |
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| 1119. |
Prepare Comparative Statement of Profit and Loss from the following information. |
Answer» SOLUTION : 
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| 1120. |
Prepare Cash Flow Statement on the basis of the information given in the Balance Sheets of Simco Ltd. As at 31st March, 2013 and 31st March, 2012:Note to Accounts |
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Answer» Solution :`{:("Cash USED in OPERATING Activities","36,000"),("Cash Used in Investing Activities","50,500"),("Cash Flow from FINANCING Activities","50,000"):}` Opening Cash and Cash Equivalents = Rs. 33,500 + Rs. 84,000 = Rs. 1,17,500. Closing Cash and Cash Equivalents = Rs. 12,500 + Rs. 68,500 = Rs. 81,000. |
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| 1121. |
Prepare Cash Flow Statement from the following Balance Sheet:Note to AccountsAdditional Information:(i) An old machineryhaving book value of Rs. 42,000 was sold for Rs. 56,000.(ii) Depreciation provided on machinery during the year was Rs. 28,000. |
Answer» SOLUTION :  WORKING NOTE: 
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| 1122. |
Prepare common size Balance Sheet of XRI Ltd. From the following information: |
Answer» Solution :Common size BALANCE SHEET as at MARCH 31,2016 and March 31,2017: 
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| 1123. |
Prepare a Comparative Statement of Profit and Loss for the year ended 31st March, 2015 from the following information: |
Answer» Solution :COMPARATIVE STATEMENT OF PROFIT AND LOSSfor the years ended 31st March, 2014 and 2015 Working NOTE: Calculation of Other EXPENSES: (a) Cos of Revenue from Operations = Purchase of Stock-in-Trade + Change in Inventories of Stock-in-Trade Forthe YEAR ending 31st March, 2014 = Rs. 2,00,000 + Rs. 50,000 = Rs. 2,50,000. For the year ending 31st March, 2015 = Rs. 6,50,000 + Rs. 60,000 = Rs. 7,10,000. Other Expenses: (b) Other Expenses: For the year ending 31st March, 2014 = 20% of Rs. 2,50,000 = Rs. 50,000. For the year ending 31st March, 2015 = 10% of Rs. 7,10,000 = Rs. 71,000. |
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| 1124. |
Prepare a Common-size Balance Sheet of KJ Ltd. From the following information: |
Answer» SOLUTION :
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| 1125. |
Prepare a common size income statement of XYZ from the following information and compute net profit ratio: |
Answer» Solution : Net PROFIT ratio=`("Net profit after tax")/("Revenue form operations")XX100` `(-Rs 648000)/(Rs 6000000)xx100=10.80%` |
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| 1126. |
Prepare a CashFlow Statement on thebasis of theinformationgivenin the Balance Sheets of Liaba Ltd., as at 31st March , 2013 and31st March 2012: |
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| 1127. |
Prepaid Expenses appear in a Company's Balance Sheet under the Sub-head ............. |
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Answer» Other CURRENT Assests |
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| 1128. |
Premium received on issue of debentures may be utilised for |
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Answer» A - For WRITING off discount allowed on issue of shares |
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| 1129. |
Premium received on the issue of shares is shown on the ……………………. side of the Balance Sheet.(Assets, Equity and Liabilities) |
| Answer» SOLUTION :EQUITY and LIABILITIES | |
| 1130. |
Premium payable on redemption of debentures is in the nature of |
| Answer» Solution :Liability Account | |
| 1131. |
(Premium for Goodwill withdrawn in full). Storng and Weak are partners sharing profits in the ratio of 2:3. On 1st April, 2019 they admit Able as partner for 1/4th share in profits. Able brought RS 1,00,000 as his capital and RS 36,000 as premium for goodwill for his 1/4th share in the profit. New profit-sharing ratio of strong, Weak and Able is agreed to be 3 : 3 : 2. Strong and Weak withdraw the premium for goodwill. Pass necessary Journal entries. |
Answer» SOLUTION : 
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| 1132. |
Premium on Redemption of Debentures is shown as |
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Answer» Long-term Borrowings |
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| 1133. |
Premium on Redemption of Debentures Account is : |
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Answer» PERSONAL Account |
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| 1134. |
Premium on issued of shares can be used for |
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Answer» issue of fully PAID BONUS shares. |
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| 1135. |
Premium on issue of shares can be used for |
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Answer» ISSUE of fully PAID bonus shares |
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| 1136. |
Prem, Param and Priya were partners in a firm. Their rixed capitals were Prem Rs 2,00,000, Param Rs 3,00,000 and Priya Rs 5,00,000. They were sharing profits in the ratio of their capitals. The firm was engaged in the sale of ready-to-eat food packets at three different locations in the city, each being managed by prem, Param and Priya. The outlet managed by Prem was doing more business then the outlets managed by Param and Priya. Prem requested Param and Priya for a higher share in the profits of the firm which Param and Priya accepted. It was decided that the new profit-sharing ratio will be 2:1:2 and its effect will be introduced retrospectively for the last your years. The profits of the last four years were Rs 2,00,000, Rs 3,50,000, Rs 4,75,000 and Rs 5,25,000 respectively. Showing your calculations clearly, pass a necessary adjustment entry to give effect to the new agreement between Prem, Param and Priya. |
Answer» SOLUTION :Total PROFITS earned during LAST four years = Rs 2,00,000 + Rs 3,50,000 + Rs 4,75,000+ Rs 5,25,000 = Rs 15,50.000.  
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| 1137. |
Prayuj Ltd. forfeited 2,000 shares of Rs. 10 each, fully called-up, on which they had received only Rs. 14,000. 50 of theforfeited shares were reissued for Rs. 9 per share fully paid-up. Pass necessary Journal entries for forfeiture and reissue of shares. Also prepare Shares Forfeited Account. |
Answer» SOLUTION :
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| 1138. |
premium collected on issue of debentures is credites to 'Securities Premium Reserve Account'. Do you think it can be credited to any other account ? Give your reasons. |
| Answer» Solution :Premium COLLECTED on ISSUE of securities, i.e., SHARES or debentures is credited to Securities Premium Reserve Account. It can not be credited to any other account. It is so becaues SECTION 52(2) of the Companies Act, 2013 restricts the utilisation of premium collected for the specifiedpurposes. | |
| 1139. |
Prashant and Rajesh were partners in a firm sharingprofits in the ratio of3 : 2 . In spite of repeated reminders by the authorities , they kept dumping hazardous material into a nearby river . The court ordered for the dissolution of their partnership firm on 31st March 2012 . Prashant was deputed to realisethe assets and to pay the liabilities . He was paid ₹ 1, 000 as commission for his services . The financial position of the firm on 31st March , 2012 was as follows : Following was agreed upon : (i) Prashant agreed to pay off his wife's loan. (ii) Debtors realised ₹ 24,000. (iii) Rajesh took all investments at ₹ 27,000 . (iv) Building realised ₹ 1, 52 , 000. (v) Creditors were payable after 2 months . They were paid immediately at 10 % discount . (vi) Bills Receivable were settled at a loss of ₹ 1, 400 . (vii) Realisation expenses amounted to ₹ 2,500 . Prepare Realisation Account , Partner's Capital Accounts and Cash Accounts to close the books of the firm . |
Answer» SOLUTION : 
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| 1140. |
Praveen, Sahil and Riya are partners having fixed capitals of Rs 2,00,000, Rs 1,60,000 and Rs 1,20,000 respectively. They share profits in the ratio of 3:1:1. The Partnership Deed provided for the following which were not recorded in the books: (i) Interest on Capital @5% p.a. (ii) Salary to Praveen Rs 1,500 p.m. and to Riya Rs 1,000 p.m. (iii) Transfer of profit to General Reverse Rs 10,000. Net Profit fot the year ended 31st March, 2015 was Rs 1,00,000. Pass necessary rectifying entry for the above adjustments in the books of the firm. Also show your workings clearly. |
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Answer» Solution :Dr. Praveen's Current A/c, Rs 10,400 and Sahil's Current A/c, Rs 4,800. Cr. Riya's Current A/c, Rs 5,200 and General RESERVE A/c, Rs 10,000. [Hint: Correct DIVISIBLE Profit = Rs 1,00,000- Rs 10,00 (General Reserve) - Rs 30,000 (SALARY of Praveen and Riya)- Rs 24,000 (Interest on CAPITAL of Praveen, Sahil and Riya) = Rs 36,000 in profit-sharing ratio i.e., `3:1:1.`] |
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| 1141. |
Pranav, Karan and Rahim were partnere in a firm sharing parofits and losses in the ratio of 2:2:1. on 31st March, 2017 their Balance Sheet was as follows: Karan died on 12th June, 2017. According to the Partnership Deed, the legal representatives of the deceased partner ware entitled to the following: (i) Balance in his Capital Account. (ii) Interest on Capital @12% p.a. (iii) Share of goodwill. Goodwill of the firm on Karan's death was valued at Rs 60,000. (iv) Share in the profit of the firm till the date of his death, calculated on the basis of last year's profit. The profit of the firm for the year ended 31st March, 2017 was Rs 5,00,000. Prepare Karan's Capital Account to be presented to his representatives. |
Answer» Solution : Working NOTES: 1. Karan died on 12th JUNE, 2017. Number of days from last Balance Sheet (i.e., 31ST March, 2017) till the DATE of death = 30 + 31 + 12 = 73 days. Interest on Capital `=Rs2,00,000xx73//365xx12//100=Rs4,800.` 2. Karan's SHARE of Goodwill = `Rs 60.000xx2//5=Rs24,000,`which is contributed by Pranav and Rahim in their gaining ratio, i.e., `2:1.` Thus, Pranav's contribution `Rs=24,000xx2//3=Rs16,000.` Rahim's contribution `=Rs24,000xx1//3=Rs8,000.` 3. Karan's share of profit till the date of death `=Rs5,00,000xx73//365xx2//5=Rs40,000.` |
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| 1142. |
Pranshuand himanshuarepartnenrs sharingprofitsand losses in theratioof 3:2respectivelytheyadmitanshu aspartner with1/6share in theprofits of thefirmpranshu personallyguaranteedthatanshu'sshareof profitwiouldnotbe lessthan Rs. 30,000in anyyearthae netprofitof thefirmfor theyearending31st march,2013wasRs. 90,000 prepareprofitand lossAppropriationAccount . |
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Answer» Rs. 30,000 ; Himanshu-RS. 30,000andAnshu -rs,. 30.000newratio =3:2:1 |
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| 1143. |
Prachi, Ritika and Ishita were partners in a firm sharing profits and losses in the ration of 5:3:2. in spite of repeated remainders by the authorities, they kept dumping hazardous material into a nearby river. The court ordered for the dissolution of their partnership firm on 31st March, 2012. Prachi was deputed to realise the assets and pay the liabilities. She was paid Rs 1,000 as commission for her services. The financial position of the firm was follows: Following was agreed upon: Prachi took over investments for Rs 12,500. stock and furniture realised Rs 41,500. There was old furniture which has been written off completely from the books. Ritika agreed to take away the same at the price of Rs 3,000. Compensation paid to the employees amounted to Rs 8,000. This liability was not provided in the above Balance Sheet, Realisation expenses amounted to Rs 1,000. Prepare Realisation Account, partners' Capital Accounts and Cash A/c to close the books of the firm. |
| Answer» Solution :Loss on realisation-Rs 6,000, FINAL Payment, Prachi-Rs 25,500, Ritika-Rs 25,200, CASH BROUGHT in by Ishita-Rs 19,200. TOTAL of Cash Account -Rs 69,700. | |
| 1144. |
Prachi, Ritika and Ishita were partners in a firm sharing profits and looses in the ratio 5:3:2. In spite of reperated reminders by the authorities, they kept dumping hazardou material into a nearby river. The court ordered for the dissolution of their partnership firr on 31st March, 2019. Identify the value being conveyrd in the question. |
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| 1145. |
Prakash Ltdhas a term-loan of Rs 1000000.Interest on the loan for the year is Rs 125000 and its Profit before Interest and Tax is Rs 500000.Calculate Interest Coverage Ratio. |
| Answer» SOLUTION :Interest COVERAGE Ratio = `("Profit before Interest and Tax")/("Interest on Long-term Debt")=(RS 500000)/(Rs 125000)=4 Times` | |
| 1146. |
Pragati Enterprises Ltd. Issued 35,000 61//2 debentures of Rs.100 each on October 1, 2011 redeemable as follows : {:("On 31st March 2015","5,000 Debentures"),("On 31st March 2016","5,000 Debentures"),("On 31st March 2017","7,000 Debentures"),("On 31st March 2018","7,000 Debentures"),("On 31st March 2019","11,000 Debentures"):}The Board decides to transfer to Debenture Redemption Reserve Rs.50,000 and Rs.4,00,000 on March 31, 2012 and 2013 respectively and balance required to be transferred to Debenture Redemption Reserve on March 31, 2014. Record necessary journal entries. Ignore entries for payment of interest. Investment as required by law was made in fixed deposit of the bank. |
Answer» SOLUTION :    WORKING Note : (1) DRR will be transferred to GENERAL Reserve A/c as FOLLOWS : On 31st March 2015 : `8,75,00xx(5,00,000)/(35,00,000)`=Rs.1,25,000 On 31st March 2016 : `8,75,000xx(5,00,000)/(35,00,000)`=Rs.1,25,000 On 31st March 2017 : `8,75,000xx(7,00,000)/(35,00,000)`=Rs.1,75,000 On 31st March 2018 : `8,75,000xx(7,00,000)/(35,00,000)`=Rs.1,75,000 On 31st March 2019 : `8,75,000xx(11,00,000)/(35,00,000)`=Rs.2,75,000 |
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| 1147. |
P,Q, R and S were partners in a frim sharingprofits in the ratio of 1:4:2:3. On 1st April, 2016, their BalanceSheet was follows. From theabovedate, partners decided to share the future profits equally .For thispurpose the goodwill of thefirmwas valuedat ₹2,70,000. The partnersalso agreed for the following :(i) ClaimaginstWorkemenCompenstionReservewas estimated at ₹2,00,000. (ii) Capitals of thepartners were to beadjusted accordingto the new profit -sharingratioby bringingor payingcashas thecase may be . Prepare RevalutionAccount , Partners CapitalAccounts andthe BalanceSheet of the reconstituted firm. |
Answer» Solution :  WORKING Notes: Value of Goodwill = Rs. 270000 Calculation of Sacrifice/(GAIN) of each partner:  JOURNAL Entryfor ADJUSTMENT of Goodwill `{:(,"To Q's Capital A/c (₹ 2,70,000"xx"6/40)",,"40,500"),(,"To S's Capital A/c (₹ 2,70,000"xx"2/40)",,"13,500"):}` 2.Adjustmentof Capital: `{:(,,"₹"),(,"Adjusted P's Capital (₹2,00,000 - ₹3,000 -₹40,500)", "1,56,500"),(,"Adjusted Q's Capital (₹3,00,000 - ₹12,000 + ₹40,500)","3,28,500"),(,"Adjusted R's Capital (₹4,00,000 - ₹6,000 -₹13,500)","3,80,500"),(,"Adjusted S's Capital (₹5,00,000 - ₹9,000 +₹13,500)","5,04,5000"),(,"Total Capital of the New Firm",underlineunderlineoverline"13,70,000"):}` Capital of EACHPARTNER P,Q, R and S in the New firm as per New Profits- Sharing Ratio will be ₹ 3,24,500 (i.e., `₹ 13,70,000 xx 1//4`) 
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| 1148. |
P,Q and R were partners in a firm sharing profits in the ratio 3:2:1. They admitted S as new partner for 1/8th share in the profits which he acquired 1/16th form P and 1/16th from Q. Calculate new profit-sharing ratio of P,Q,R and S. |
| Answer» SOLUTION :NEW Profit-sharing RATIO of P,Q, R and S `=21:13:8:6.` | |
| 1149. |
P,Q and R partners sharing profits and losses in the ratio of 3:2:1. Q retired from the business on 1st April, 2019. Q decided to place the amount received in fixed deposit. Half of the interest received was to be donated to an Orphanage every year and another half for the education of girls. What values are conceyed by 'Q' |
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| 1150. |
P.Q and Rarepartnerssharingprofitsin theratio 5:4:1 respectvelyR isguaranteedthat hisshareofprofitin anyyearwillnot beless thanRs. 50.000theprofits for the yearending31stmarch,2019is Rs.3.50.000 Amountofshortfallin theprofitstheprofitsof Rwill borneby P andQ in thefo 3:2respectively passneceassaryjournalentryregardingdeficiency bornebyP and Q. |
Answer» Solution : Workingnote : whenthe netprofitof Rs. 3,50,000 isdistributedthepartners in THERATIOOF 5:4:1 R get Rs. 35,000(i.e.,Rs.3,50,000`xx` 1/10 )But hisguranteedprofitis Rs.50,000 theshortfail 15,000 (i.e.,Rs. 50,000-Rs.35,000 is to bebornebyPand Q in theratio of 3:2respectively,in effectshortfall bornebyPis Rs. 9,000(i.e.,Rs. 15,000`xx`3/5 ) andshortfallbornebyQ ISRS. 6,000 (i.e., Rs. 15,000`xx`2/5). |
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