(iv) Shyam wants to be credited with interest on the capital of 6% per year. Invalid Answer Shareholders must not be granted interest on the capital. 2. Indicate whether the following statements are true or false: (i) A valid partnership may be made without written agreement between the partners; A partnership is the result of an agreement between two or more people to do business and share their profits and losses. The agreement becomes the basis of the relationship between the partners. Such an agreement does not require written form. An oral agreement is also valid. But to avoid controversy, it is better for the partners to have a written agreement. Anubha and Kajal are partners in a company that shares profits and losses at a 2:1 ratio. Their capital was Rs 90,000 and Rs 60,000. The profit during the year was Rs 45,000.
According to the partnership deed, both partners are allowed to have a salary, Rs 700 per month in Anubha and Rs 500 per month in Kajal. Authorized return on capital @ 5% per year The drawings at the end of the period were Rs 8,500 for Anubha and rs 6,500 for Kajal. Interest of 5% per annum is charged on subscriptions. Prepare partners` capital accounts assuming the capital account fluctuates. Question 2. Discuss the main provisions of the Indian Partnership Act, 1932 that are relevant to partnership accounts when there is no partnership deed. Answer It is always suggested that there must be an act of partnership between the partners before embarking on a partnership company. But sometimes a partnership is started without signing such a document. In this case, the partnership rules under the provisions of the Indian Partnership Act 1932 apply. The following are the provisions that are relevant to company accounts in the absence of a company deed.
(i) Profit-sharing ratio If a company deed is not done, or even if it is done and is silent on the sharing of profits or losses among the shareholders of a company, then under the Partnerships Act of 1932, profits and losses must be distributed equally among all shareholders of the company. (ii) Interest on capital If there is no title to a company or if the deed of company is silent on the question relating to interest in the capital of the partner, no interest is granted on the principal of the partners under the Companies Act 1932. However, if they agree on this issue, they are free to grant interest on the capital from the company`s profits. iii) Interest on subscriptions there is no partnership The issue of „drunkenness“ interest on subscription is dealt with in accordance with the provisions of the Partnerships Act 1932. (iv) Interest on the partner`s loan If there is no title to a partnership between the partners or if the deed of partnership is silent on the interest on the partner`s loan, then under the Partnerships Act, 1932. The partners are entitled to 6% per year of interest on the loan they have transmitted to the company (v) Salary to the partner If there is no company deed or if she expresses herself on the matter in relation to the salary to a partner, then in accordance with the rules of the Law on Partnerships of 1932. no partner is entitled to a salary. In the absence of a corporation deed, specify the following rules: Respond to decisions under the Partnerships Act of 1932 if there is no agreement.
Decision on Harshad`s claim (i) Interest on the partners` capital is not allowed to the partners (ii) Profits are distributed equally among all partners Decision on Dhiman`s claim (i) Profits must be distributed equally among all partners, fii) No partner is allowed to receive a salary unless there is an agreement on remuneration. (iii) Interest of 6% per annum is allowed on the Partner`s loan, while no interest is allowed on the principal. NCERT Solutions for Class 12 Accounting – Accounts of Nonprofit Organizations and Partnerships Chapter 2 (Accounting for Partnership: Basic Concepts) contains all the questions with a solution and a detailed explanation. This will eliminate students` doubts about each question and improve application skills as they prepare for the jury exams. Detailed, step-by-step solutions will help you better understand the concepts and eliminate your confusion, if any. Shaalaa.com offers CBSE Class 12 Accountancy – Organization and Partnership Accounts solutions in a way that helps students understand basic concepts better and faster. (ii) Interest on the partner`s capital: No principal interest will be granted unless there is a company deed. NCERT Solutions for Class 12 Trade Accounting Chapter 2 Accounting for Partnership: The basic concepts are provided here with simple step-by-step explanations. These Solutions for Accounting for Partnership: The basic concepts are very popular with Class 12 Accounting Business Students Accounting for Partnership: Basic concept solutions are handy for doing your homework quickly and preparing you for exams. All questions and answers from the NCERT Book of Class 12 Commerce Accountancy Chapter 2 are provided free of charge here. You`ll also love the ad-free experience on Meritnation`s NCERT solutions. All NCERT solutions for Class 12 business accounting are expertly created and are 100% accurate.
Question 7. In the absence of a company deed, the rules relating to the following (i) distribution of profits and losses (ii) interest on the principal of the partner (iii) interest on the drawings of the partner (iv) interest on the loan of the partner (v) salary to a partner response :(i) sharing of profits and losses In the absence of a company deed, the profit sharing between the pad maw is the same. (ii) Interest on the Partner`s principal In the absence of a paonemnio oeeu interest in the Partner`s principal, no interest will be granted. (iii) Interest on Partner`s Subscriptions In the absence of an act of partnership, no interest will be charged on Partner`s Subscriptions. (iv) Interest on partners` loans In the absence of a company deed, if the partner grants a loan to the Company, he is entitled to a fixed interest percentage of 6% of the year. (v) Partner`s salary In the absence of the sponsorship certificate, one partner is entitled to a salary for their work, even if the other is not in paid employment. Reasons: In the absence of a company deed, no partner can take interest on the capital, salary and commission, etc., but only a loan interest of 6% per year is allowed and the profit sharing ratio must be the same. Sukesh and Vanita were partners in a single company. Their partnership agreement provides as follows: 1. Rani and Suman are in partnership with capital of Rs, Rs 80,000 and Rs 60,000 respectively. In 2006-2007 Rani Rs.
10,000 from their capital and Suman Rs. 15,000. The profit before the collection of interest on the principal was 50,000 rupees. Ravi and Suman shared profits at a 3:2 ratio. Calculate the amounts of interest on their principals at 12% per annum for the year ending March 31, 2007. (6) Reciprocity: The partnership may be continued by all or one of them acting on behalf of all. This means that all members of a company also have the right to participate in the activities of the company, or one of them acting on behalf of all. Each partner acts as a representative of others and binds others by his action and is in turn bound to others by their action. Note: For questions about the allowable limit of the maximum number of partners in a partnership, students accept the limit of 50. The statutes may be made orally or in writing.
It is not mandatory to enter into a partnership agreement in writing in accordance with the Partnerships Act 1932. However, a written partnership act is desirable as an oral agreement as it avoids disputes and misunderstandings between partners. It also helps to resolve disputes (as the case may be) between the partners, as reference can be made to the written partnership deed at any time. If the written partnership deed is duly signed and registered under the Partnerships Act, it may be used as evidence in court. 3. Verma and Kaul are partners in a law firm. The statutes stipulate that interest on subscriptions @ 6% per year will be charged. Verma deducts Rs. 2,000 per month from April 1, 2006 to March 31, 2007.
Kaul withdrew Rs 3,000 per quarter on April 1, 2006. Calculate interest on the partner`s subscriptions. In the partnership, two or more people join forces to start a business and share its profits and losses. Persons who have entered into a partnership with each other are individually referred to as partners and collectively as a „company“, and the name under which their activity is carried on is referred to as the „name of the company“. A partnership is not a separate legal entity, with the exception of its members. 1. To record omitted items and correct errors, if any – After the preparation of the profit and loss account and the balance sheet, if an error or omission is found, these errors or omissions will be adjusted by opening the profit and loss adjustment account in the following accounting period, without modifying the old profit and loss account. 12.
Sukesh and Vanita were partners in a company. .