(d) 11,90,000. Question no.'s 39, 40 and 41 are based on the hypothetical situation given belov Akhil and Bipul were in partnership. On 1st April, 2020, they had capitals of < 5,00,0d and 3,00,000 respectively, General Reserve existed in the Balance Sheet at 50,0000 and also Profit and Loss Account (Credit) of 1.00.000, On 1st October, 2020. Akhil advanced 7 1,00,000 as loàn to the firm and on the same date, the firm advanced loan of < 50,000 to Bipul. Both the loans were without an agreement. Interest on Capital is to be anowed @ 5% p.a. as a charge. Loss for the year before allowing and charging interest on loans was 50,000. Answer the following questions on the basis of above: 39. Interest on Capital (a) will be allowed by debiting Profit and Loss Account (Accumulated Profits). (b) will be allowed by debiting General Reserve. (c) will be allowed and it will increase the amount of loss. (d) will not be allowed. 40. Interest on Loan by Akhil (a) will be allowed @ 6% p.a. and debited to Profit and Loss Account (Accumulated Profits) because the firm has incurred loss during the year. (b) will be allowed @ 6% p.a. and debited to General Reserve because the firm has incurred loss during the year. (c) will be allowed @6% p.a. and debited to Profit and Loss Account, which will increase the amount of loss. (d) will not be allowed because the firm has incurred loss during the year. 41. What will be the amount of accumulated profit as on 31st March, 2021? (b) 1,00,000. (a) 50,000. (d) None of these. (c) 7,000.
(d) 11,90,000. Question no.'s 39, 40 and 41 are based on the hypothetical situation given belov Akhil and Bipul were in partnership. On 1st April, 2020, they had capitals of < 5,00,0d and 3,00,000 respectively, General Reserve existed in the Balance Sheet at 50,0000 and also Profit and Loss Account (Credit) of 1.00.000, On 1st October, 2020. Akhil advanced 7 1,00,000 as loàn to the firm and on the same date, the firm advanced loan of < 50,000 to Bipul. Both the loans were without an agreement. Interest on Capital is to be anowed @ 5% p.a. as a charge. Loss for the year before allowing and charging interest on loans was 50,000. Answer the following questions on the basis of above: 39. Interest on Capital (a) will be allowed by debiting Profit and Loss Account (Accumulated Profits). (b) will be allowed by debiting General Reserve. (c) will be allowed and it will increase the amount of loss. (d) will not be allowed. 40. Interest on Loan by Akhil (a) will be allowed @ 6% p.a. and debited to Profit and Loss Account (Accumulated Profits) because the firm has incurred loss during the year. (b) will be allowed @ 6% p.a. and debited to General Reserve because the firm has incurred loss during the year. (c) will be allowed @6% p.a. and debited to Profit and Loss Account, which will increase the amount of loss. (d) will not be allowed because the firm has incurred loss during the year. 41. What will be the amount of accumulated profit as on 31st March, 2021? (b) 1,00,000. (a) 50,000. (d) None of these. (c) 7,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please answer 41 in detail
Transcribed Image Text:(d) 11,90,000.
Question no. s 39, 40 and 41 are based on the hypothetical situation given belovw.
Akhil and Bipul were in partnership. On 1st April, 2020, they had capitals of 5,00,0
and 3,00,000 respectively, General Reserve existed in the Balance Sheet at ? 50,0000 and
also Profit and Loss Account (Credit) of7 1.00.000, On 1st October, 2020. Akhil advanced
7 1,00,000 as loàn to the firm and on the same date, the firm advanced loan of < 50,000
to Bipul. Both the loans were without an agreement, Interest on Capital is to be allowed
@ 5% p.a. as a charge. Loss for the year before allowing and charging interest on loans
was 50,000.
Answer the following questions on the basis of above:
39. Interest on Capital
(a) will be allowed by debiting Profit and Loss Account (Accumulated Profits).
(b) will be allowed by debiting General Reserve.
(c) will be allowed and it will increase the amount of loss.
(d) will not be allowed.
40. Interest on Loan by Akhil
(a) will be allowed @ 6% p.a. and debited to Profit and Loss Account (Accumulated
Profits) because the firm has incurred loss during the year.
(b) will be allowed @ 6% p.a. and debited to General Reserve because the firm has
incurred loss during the year.
(c) will be allowed @ 6% p.a. and debited to Profit and Loss Account, which will increase
the amount of loss.
(d) will not be allowed because the firm has incurred loss during the year.
41. What will be the amount of accumulated profit as on 31st March, 2021?
(b) 1,00,000.
(a) 50,000.
(d) None of these.
(c) 7,000.
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