Prasanna

Students can Download Chapter 5 Dissolution of Partnership Notes, Plus Two Accountancy Notes helps you to revise the complete Kerala State Syllabus and score more marks in your examinations.

Kerala Plus Two Accountancy Notes Chapter 5 Dissolution of Partnership

Summary
Dissolution of Partnership Firm
When the partnership between all the partners of a firm comes to an end it is called dissolution of partnership firm. When the firm is dissolved, it leads to the closure of the business – firm’s book of accounts are closed, assets of the firm realised, liabilities are paid off and whatever remains is paid to the partners in settlement oftheir accounts.

Dissolution of Partnership
When the relation of partnership among different partners changes without affecting the entity of the firm, it is called dissolution of partnership. Dissolution of partnership takes place in the case of admission, retirement, death etc. This does not necessarily involve dissolution of partnership firm.

Modes of dissolution of firm

1. Dissolution by agreement
2. Compulsary dissolution
3. Dissolution on the happening of certain contingencies.
4. Dissolution by notice
5. Dissolution by court

Accounting treatment
The following accounts are prepared on dissolution.

Realisation account
Realisation account is a nominal account prepared for the purpose of closing the accounts of assets and liabilities and for finding out the profit or loss on realisation of assets and payment of liabilities. The profit or loss on realisation is transferred to partners’ capital accounts in their profit sharing ratio.

Capital accounts of partners
Each, partner’s capital account is credited with accumulated profit and realisation profit, if any, and debited with accumulated loss and realisation loss. After making any other adjustments, as per agreement, the balance in the capital account represents the amount due to or due from each partner. Partners’ capital accounts are closed by paying off orbringing in cash, as the case may be.

Cash/Bank account
After entering the cash realised from assets and paying towards liabilities and realisation expenses the balance in this account equals the balance in the capital accounts of all partners. When settlement is made cash/bank account and partners’ capital accounts wil automatically be closed.

Journal entries usually passed at the time of dissolution of a partnership firm are the following
1. For closing the accounts of assets and transferring the same to realisation account.

2. For closing the accounts of liabilities and transferring to realisation account.

3. For transferring provisions relating to assets if any

4. For transferring provisions relating to liabilities

5. (i) On realising or selling the assets

(ii) If an asset is taken over by a partner

6. (i) On paying the liabilities (external)

(ii) If a partner agrees to discharge a liability

7. (i) When realisation expense is met by the firm

(ii) If realisation expense is paid by a partner Realisation a/c

8. (i) For the amount realized from new or unrecorded asset

(ii) If an unrecorded or new asset is taken over by a partner

9. (i) If any new or unrecorded liability is paid

(ii) If any new or unrecorded liability is taken over by a partner

10. For transferring realisation profit to partners’ capital

11. For transferring accumulated profits and reserves.

12. On discharge of loans to partners

13. For cash brought in by a partner, if required so

14. For cash paid off to a partner, as the case

Students can Download Chapter 4 Reconstitution of a Partnership Firm – Retirement/Death of a Partner Notes, Plus Two Accountancy Notes helps you to revise the complete Kerala State Syllabus and score more marks in your examinations.

Kerala Plus Two Accountancy Notes Chapter 4 Reconstitution of a Partnership Firm – Retirement/Death of a Partner

Summary
Retirement of a partner
A partner’s withdrawal from the business with the consent of other partners or as per the provisions of the partnership deed or by giving notice of retirement is called retirement of a partner.

Accounting problems on retirement
Accounting problems that arise on the retirement of a partner are as follows
(a) New profit sharing ratio:
It is the ratio in which the remaining partners will share future profits after the retirement of any partner.
New share = Old share + acquired share from outgoing partner.

(b) Gaining Ratio:
The ratio in which the continuing partners decide to share the outgoing partner’s profit is called gaining ratio.
Gaining ratio = New ratio – Old ratio

(c) Treatment of goodwill:
A partner who is retiring from the firm is entitled to his share of goodwill. It is fair and equitable to compensate the retiring partner for the respective share of goodwill by the continuing partners in their gaining ratio.

I. When goodwill does not appear in the books.
A. Goodwill is raised at its full value and retained-in the books as such. The journal entry is,

B. Goodwill is raised at its full value and written off immediately.
The journal entry is

C. Goodwill is raised to the extent of retiring partner’s share and written off immediately.

D. No goodwill is raised at all in firm’s books.
Journal entry is

II. When goodwill already appearing in the books.
(i) If the book value of goodwill is lower than its present value
Journal entry is:

To All partners cap a/c (in old ratio)

(ii) If the book value of goodwill is greater than its current value:
Journal entry is:

Accumulated profits/losses:
Reserves and accumulated profits/losses belong to all the partners and hence should be transferred to capital accounts of all partners.
(i) For transfer of accumulated Profits (Reserves)

(ii) For transfer accumulated losses

(e) Revaluation of assets and liabilities:
Same as in the case of admission.

(f) Settlement of accounts:
The total amount due to the retiring partner may be paid in one lump sum or instalments with interest.
(i) When retiring partner is paid cash in full.

(ii) When retiring partner’s whole amount is treated as loan.

(iii) When retiring partner is partly paid in cash and the remaining amount treated as loan.

(iv) When loan a/c is settled by paying in instalment includes principal and interest.

(g) Adjustment of capitals of continuing partners:
At the time of retirement the remaining partners may decide to keep their capitals in their profit sharing ratio.
Total capital = Combined adjusted capital of remaining partners.

Death of a Partner:
Death, being a natural phenomenon, may take place at any time. A partnership comes to an end on the death of any one of the partners, although the firm may continue with the remaining partners. The accounting treatment for various adjustments in case of death of a partner is similar to that of a retiring, partner.

According to Section 37 of the Partnership Act, the executors of the deceased partner are entitled, at their choice, to interest at 6% p.a. on the amount due, from the date of death till the date of payment or that portion of profit earned by the firm with the help of the amount due to the deceased partner.

The amount due to the deceased partner may be paid off immediately to his legal heirs, or executors. Whenever a firm is not in a position to make the final payment immediately in cash, the same is transferred to his executor’s loan account. The Journal entry will be:

Afterwards, the balance appearing in this account can be paid off in instalments. On payment of instalments periodically, as agreed, the journal entry will be:

Students can Download Chapter 3 Reconstitution of a Partnership Firm – Admission of Partner Notes, Plus Two Accountancy Notes helps you to revise the complete Kerala State Syllabus and score more marks in your examinations.

Kerala Plus Two Accountancy Notes Chapter 3 Reconstitution of a Partnership Firm – Admission of Partner

Summary
Reconstitution of a partnership firm
Reconstitution of a partnership firm means a change in the nature of relationship amongst members, effected through a fresh agreement under which the existing business continues.

Mode of reconstitution
Reconstitution of a partnership firm usually takes place in any of the following ways:

1. Change in the profit sharing ratio of the existing partners
2. Admission of a partner
3. Retirement of a partner
4. Death of a partner

Admission of a partner
Inclusion of a person as partner to an existing partnership firm is called admission of a partner. Acquisition of rights by a new partner:

1. right to share the assets of the firm
2. right to share profits/losses of the firm

Accounting problems at the time of admission

1. Capital of new partner
2. Calculation of new profit sharing ratio
3. Calculation of sacrificing ratio
4. Treatment of goodwill
5. Revaluation of assets and liabilities
6. Adjustment of reserves and accumulated profits/ losses
7. Adjustment of capital accounts of partners

New profit sharing ratio
The ratio in which the old partners and new partner share the future profit after the admission is new ratio.
New ratio = old ratio – sacrificing ratio

Sacrificing ratio
The ratio in which the old partners agree to sacrifice their share of profit in favour of the incoming partner is called sacrificing ratio.
Sacrificing ratio = old ratio – New ratio

Goodwill
Goodwill is the value of the reputation of a firm in respect of profits in future over and above the normal profits. It is an invisible intangible asset. Thus goodwill really arises only if a firm is able to earn super profit.
Treatment of goodwill (Different situations):

1. Premium paid directly
2. Premium brought in cash and retained in business
3. Premium brought in cash and half the amount withdrawn by partners
4. Premium brought in kind
5. New partner brings in only a portion of the goodwill in cash
6. New partner is not in a position to bring premium in cash
7. Goodwill existing in the books at the time of admission

Methods of valuation of goodwill:
1. Average profit method:
Goodwill = \(\frac{\text { Total profit }}{\text { No. of years }}\) × No. of years purchase

2. Super profit method:
Normal Profit = Cap employed × \(\frac{N R R}{100}\)
Average Profit = \(\frac{\text { Total profit }}{\text { No. of years }}\)
Super profit = Average profit – Normal profit
Goodwill = Super Profit × No. of years purchase

3. Capitalisation method:
(a) Capitalising the average profit:
Goodwill = Capitalised value of average profit – capital employed – Total assets (excluding goodwill) – outside liabilities
Capital employed = Total Asset – Outside liabilities.

(b) Capitalisation of superprofit
Goodwill = Super profit × \(\frac{100}{\mathrm{NRR}}\)

Treatment of goodwill:
Premium method – When the new partner brings cash for his share of goodwill.
(i) When this amount is paid directly/ privately to the old partner by new partner.
No entry is needed.

(ii) When the amount is paid through firm

To Old partner’s capital A/c (Sacrificing Ratio)

(iii) When the old partners decide to withdraw their amounts (full or part)

When goodwill already exists in books, the existing goodwill must be written off by debiting the old partners in their old ratio.

If they decide to retain goodwill as such, the amount to be brought in by the new partner will have to be proportionately reduced.

Revaluation of Assets and Reassessment of liabilities
Assets and liabilities are revalued at the time of admission. The account opened for this purpose is called revaluation account. The Journal entries recorded for revaluation of assets and reassessment of liabilities are as follows:
1. For increase in the value of an asset

2. For reduction in the value of an asset

3. For appreciation in the amount of a liability

4. For reduction in the amount of a liability

5. For an unrecorded asset

6. For an unrecorded liability

7. For transfer of gain on Revaluation in credit balance

8. For transferring loss on revaluation

Adjustment for reserves and accumulated Profits/Losses
Items like reserve and accumulated profits/losses appearing in the balance sheet should be distributed to old partners at the time of admission of a partner.
1. Reserve and Profit & Loss A/c if any on the liability side of balance sheet Reserve A/c Dr.

2. Profit & Loss A/c on the asset side of balance sheet

Adjustment of capital accounts of partners
It may sometimes be agreed that the capitals of all partners should be in proportion to their respective share in profits. This can be effected in two ways:

1. Adjustment of old partners’ capital accounts on the basis of incoming partner’s capital
2. Bringing in proportionate capital by the incoming partner based on the capitals of existing partners.

Change in profit sharing ratio
Sometimes, the existing partners may decide to change their profit sharing ratio. In such a case, those who gain must compensate the others who have made the sacrifice on account of change in profit sharing ratio.

Students can Download Chapter 2 Spread Sheet Notes, Plus Two Accountancy Notes helps you to revise the complete Kerala State Syllabus and score more marks in your examinations.

Kerala Plus Two Accountancy Notes Chapter 2 Spread Sheet

Spreadsheet – Meaning
Spreadsheet application is a computer program that allows to record, calculate and compare numerical or financial data. Using a spreadsheet program. We can store a lot of data in the worksheet and also arrange and analyse the data by using different functions and formulae for meaningful object.

It is used to establish relationship between two or more sets of data. Libre Office Calc, MS Office Excel, Open Office Spreadsheet etc. are examples of spreadsheet software.

Features of Spreadsheet

1. A spreadsheet is a configuration of rows and columns.
2. A spreadsheet is also known as worksheet.
3. Spreadsheet application allows to enter (ie., add) and process data.
4. It makes quick and easy financial and numerical analysis of data.
5. The data stored in the spreadsheet can be converted into graphs, charts etc.
6. It can be used to store, arrange and filter data.

Introduction to Libre Office Calc
Libre Office Calc is one of the best spreadsheet applications, which can be used to calculate, analyse and manage data. It is a Free and Open Source Software (FOSS). Libre Office Calc is available for a variety of platforms including Linux, OSX, Microsoft windows and Free BSD.
1. Features of Libre Office Calc:

• It is a spreadsheet application.
• It is both free software and open source software.
• It can be used to calculate, analyse and manage data.
• The worksheet in Libre Office Calc contains Rows and Columns in a Table format.

Basic concept of Libre Office Calc Spread Sheet
(a) Workbook:
A file in spreadsheet is known as a workbook. A work book is a collection of a number of work sheets.

(b) Work sheets:
The work area which consists of rows and columns in a spreadsheet is called worksheet. By default three worksheets – sheet-1, sheet-2, sheet-3 are available in work book.

(c) Active work sheet:
The worksheet which is available to the user for carrying out operations is called active work sheet. The name of the active worksheet will be shown in bold letters in the Sheet Tab at bottom of work sheet.

(d) Sheet Tab:
It shows the name of the work sheet at bottom left of the screen. Additional sheets can be added by clicking on the right hand side of the sheet Tab.

(e) Rename:
The Sheet-1, Sheet-2, and Sheet-3 etc. can be renamed by right clicking the mouse over the worksheet and selecting “Rename” option.

(f) Rows:
Rows are the horizontal vectors in the worksheet. These are numbered numerically
from Top to Bottom.

(g) Columns:
Columns are vertical vectors in the worksheet. These are referred by alpha characters from left to right such as A, B, C, …, AA, AB, AC …etc.

(h) Cell:
The intersection of a row and a column is called a cell. A cell is identified by a combination of an alpha – numeric character eg: A1, B6, C10, etc. This alpha numeric character is called cell address. Hence each cell has a unique address.

(i) Active cell:
When we start Libre Office Calc, the pointer (cursor) points the first cell ie., A1, and this cell is called the active cell. The active cell is distinguished by a dark box called cell pointer. We can move the cell pointer by using the arrow keys UP, DOWN, LEFT and RIGHT.

(j) Cell Reference:
A cell reference identifies location of a cell or group of selected cells in spreadsheet.

(i) Types of Cell References:
1. Relative Cell references:
By default cell reference is relative; which means that as a formula or function is copied and pasted to other cells, the cell references in the formula or function change to reflect the new location.

2. Absolute Cell reference:
The absolute cell reference consist of the column letter and row number surrounded by dollar ($) signs. Eg $A$5. An absolute cell reference is used when we want a cell reference to stay fixed on a specific cell.

3. Mixed cell reference:
It is a combination of relative and absolute cell references that holds either row or column constant when the formula or function is copied to another location.

(k) Inserting Rows and Columns:
We can add or delete Rows and Columns in a spreadsheet. To add column, click at the column header (right click on the mouse) there we get an option to add column.

Likewise, we can add rows. To delete the column, click the column header (right click on the mouse) there we get an option to delete column. Likewise we can remove rows.

(l) Ranges:
Range is a group of adjacent cells that forms a rectangular area. A range is specified by giving the address for first cell in range and the last cell in the rage, eg: range starting from A10 to A20 is written asA10:A20 where colon (:) is the range operator.

(m) Spreadsheet navigation:
We can move around a worksheet through four arrow keys. ie;

• Left arrow key
• Right arrow key
• Up arrow key
• Down arrow key

The mouse can also be used for navigation in spreadsheet except data entry. Some common operations/navigations are listed below:

Movement	Key stroke (Press Key)
One cell up	Up arrow key/Shift+Enter key
One cell down	Down arrow key/ Enter key
One cell right	Right arrow key/Tab key
One cell left	Left arrow key/Shift + Tab key
Top of sheet (Cell A1)	Ctrl + Home Key
Move to last cell containing data	Ctrl + End Key
Move to beginning of the Row	Home Key or Ctrl+Left arrow key
Move to last filled cell in column	End key

(n) Labels:
A descriptive information for rows or columns in the form of a text, or a special character is called Label.
Eg: Name, Roll No, Address

(o) Formula:
The formula means a mathematical calculation on a set of cells. The formula must start with an = (equal to) sign. When a cell contains a formula, it often contains reference to other cells.
Eg: = Basic pay + DA + HRA.

Spreadsheet Functions
Functions:
A function is a special key word which can be entered into a cell in order to perform and process the data which is appended within brackets. There is a function button f(x) on the formula bar.

When we click on it, function offers assistance through Function Wizard. Alternatively we can enter the function directly into the formula bar. A function is a build in set of formulae which starts with an ‘equal to sign’ (=).
Eg =SUM (), =AVERAGE (), =COUNT() etc.
There are twelve different categories of functions available in LibreOffice Calc. Important functions are

• Date and Time Function
• Financial Function
• Logical Function
• Mathematical Function
• Look Up and Reference Function
• Statistical Function

Date and Time Functions
These functions are used for inserting, editing and manipulating date and time. “Date” must be entered with quotation marks. Libre Office Calc internally handleds a date/time value as a numerical value. The most commonly used Date and Time Functions are:

1. TODAY ():
It is the function for today’s date in the worksheet. This helps to update the date value when we reopen the spreadsheet or modify the values of the document.
Syntax: =TODAY()

2. NOW ():
It is the function for today’s date and present time. This helps to update the date and the time value when the cell value is modified.
Syntax: =NOW()

3. YEAR ():
It helps to update the year for the given date value
Syntax: = YEAR (Date value) or = YEAR (“Date”)

4. MONTH ():
It helps to update the month for the given date value. The month is recorded as an integer between 1 and 12.
Syntax: =MONTH(“date”) or =MONTH (date value)

5. DAY ():
It helps to update the day of the given date value. The day is recorded as an integer between 1 and 31
Syntax: = DAY(“Date”) or = DAY (date value)

6. DATEVALUE ():
This function converts the given date into the corresponding date number. By default 31/12/1899 has the value as 1.
Syntax: =DATEVALUE (“Date”)

7. DATE ():
This function calculates a date specified by year, month, day and displays it in the cell’s formatting.
Syntax: = DATE (Year; Month; Day)

Mathematical Functions
The following mathematical functions are very useful in business applications.

1. SUM ():
This function adds all the numbers in a range of cells. The AutoSum (S) button can also be used directly for summation of values from cells.
Syntax:=SUM (number 1, number 2,…….)

2. SUM IF ():
It returns the sum of the cells as per a given criteria.
Syntax: = SUMIF (range, “criteria”, sum_range) where

• Range is the range of cells to evaluate.
• Criteria defines which cells will be added.
• Sum_range, is the range from which values are summed.

3. ROUND ():
This function rounds a number to specified number of digits or decimal places.
Syntax: = ROUND (Number, Count)

4. ROUNDUP():
Rounds a number up, away from zero without considering the value next to the rounding digit.
Syntax: = ROUNDUP (Number, Count)

5. ROUNDDOWN ( ):
Rounds a number down towards zero without considering the value next to the rounding digit.
Syntax: = ROUNDDOWN (Number, Count)

Statistical Functions
Statistical function operates on a set of data and give summarised results. Libreoffice Calc provides a number of statistical functions. They are

1. COUNT ():
This function used to count the number of cells in a range contains numbers only.
Syntax :=COUNT(Value 1, Value2,…)
or := COUNT (Range)

2. COUNTA():
This function used to count the number of ceils In a range contains any value. It will count number, text, time, date, logical values, error code, etc. In other words, this function counts the number of cells that are not empty in a range.
Syntax: = COUNTA (Value 1, Value 2….) or = COUNTA (Range)

3. COUNTBLANK():
This function in LibreOffice Calc count the number of empty cells in the given range. It is the opposite function of COUNTA.
Syntax: =COUNTBLANK (Range)

4. COUNTIF():
This function counts the number of cells within a given range that meet the criteria or condition.
Syntax: COUNTIF (Range, Criteria)

5. ROWS():
This function returns the number of rows in a reference or array.
Syntax = ROWS (Array)
Where Array is the reference or named area whose total number of rows is to be determihed.

6. Columns ():
This function returns the number of columns in an array or reference
Syntax: = COLUMNS (Array)
Where Array is the reference to a cell range whose total number of columns is to be found.

Text Manipulation Function
There are two types of Text Manipulation Functions in LibreOffice Calc. They are

1. TEXT ( ):
This function converts a number or I numerical value into text according to a defined format.
Syntax: TEXT (Number, Format)
This function is useful in situations to display numbers in a more readable format.

2. CONCATENATE ( ):
This function is used to combines several text strings in different cells into one string.
Syntax:=CONCATENATE (“Text 1 ”, “…..”,“ Text n”)

Logical Functions
Logical functions are used for comparison and checking a test condition. The major logical functions are IF, AND and OR.

1. IF ():
This function is used to test a condition. When the condition is TRUE, then first action is taken. When it is FALSE, then the second action is taken.
Syntax: IF (Test, Then value, Otherwise value)

2. NESTED IF ()
Libre Office Calc allows to include one function inside another function. It is called nesting of functions. The IF function can be nested, when you have multiple condition to meet.
Syntax: =IF (Test_1, Then value_1, If (Test_2, Then value _2, If (_____)))

3. AND ():
This function gives only a TRUE or FALSE answer.
Syntax: =AND (Logical value 1, Logical value 2,…)

4. OR ():
Returns TRUE if atleast one argument is TRUE. This function returns the value FALSE, If all the arguments have the logical value FALSE
Syntax: = OR (Logical value 1, Logical value 2,…)

Spreadsheet Reference Functions
The important spreadsheet reference functions are

1. LOOKUP () functions:
The LOOKUP function returns a value either from a one-row or one-column range or from an array. The lookup function has two syntax forms: Vector form and Array form.

The vector form of LOOUP looks in a one-row or one-column range (known as a vector) for a value, and then returns a value from the same position in a second one-row or one-column range.

The array form of LOOKUP looks in the first row or column of an array for the specified value, and then returns a value from the same position in the last row or column of the array.

• LOOKUP (Vector from)
  Syntax: =LOOKUP (search criterion, Search vector, Result vector)
• LOOKUP (Array form)
  =(LOOKUP (lookup_value, array)

2. VLOOK UP ():
VLOOK UP is the vertical LOOKUP function. Use VLOOK UP to search the first column (columns are vertical) of a block of data and return the value from another column in the same row.
Syntax: = VLOOKUP (Search criterion; Array; Index; Sort Order)

3. HLOOKUP ( ):
It is the Horizontal LOOKUP function, searches for a value in the first row of a table array and returns the corresponding value in ‘ the same column from another row of the same table array.
Syntax: -HLOOKUP (search criteria; index; sorted)

Financial Functions
The major financial functions of LibreOffice Calc are discussed below:

1. ACCRINT ():
This function returns the accrued interest for a security that pays periodic interest.
Syntax:= ACCRINT(Issue, First_nterest, settlement, rate, Par, frequency, basis, calc_method)

2. CUMIPMT():
This function returns the cumulative interest paid between two periods.
Syntax: = CUMIPMT (Rate, NPER, PV, S, E, Type)

3. PV():
This function is used to calculate the amount of money needed to be invested at a fixed rate today, to receive a specific amount, over a specified number of periods.
Syntax: = PV (Rate, NPER, Pmt, FV, Type)

4. PMT ():
PMT function calculates the equal periodic payment for an annuity with constant interest rates.
Syntax: = PMT (Rate, NPER, PV, FV, Type)

5. FV():
This function calculates the future value of an investment based on periodic, constant payment and a constant interest rate.
Syntax: = FV (RATE, NPER, PMT, PV, TYPE)

6. RATE ():
This function returns the interest rate per period of an annuity.
Syntax: = RATE (NPER, PMT, PV, FV, Type, Guess)

7. NPV ():
This function calculates the net present value of an investment by using a discount rate and a series of future payments (negative values) and income (positive values)
Syntax:- NPV(Rate, Value 1, Value 2,….)

Data Entry, Text Management, and Cell Formatting
In any computerised business application, the basic requirement is to input data, which may be either for processing or to update various data elements. In both the cases, data should be correct, accurate and should be in proper format.

Data Entry
Libreoffice Calc facilitates fast data entry. Some of the methods for data entry are mentioned below:

1. The data fill options:
The ‘fill’ command can be used to fill data into worksheet cells. To fill quickly in several types of data series, we select cells and drag the fill handle (A fill handle is the small black square in the lower-right corner of the selection). When we point to the fill handle, the pointer changes to + symbol.

2. Import/Copy Data from other sources:
This method will transfer data into required cells by copying or importing an external file to calc sheet.

3. Data validation:
This is a feature to define restrictions on type of data entered into a cell. We can configure data validation rules for cells data that will not allow users to enter invalid data. There may be warning messages when users tries to type wrong data in the cell.

Data Formatting
Formatting of spread sheets makes easier to read and understand the important information. On the Ribbon there are several tools and shortcuts to format spreadsheets effectively. Some of them are explained below.

1. Number formatting:
Number formatting includes adding percent symbols (%), commas(,), decimal places (.), and currency signs (?) date (dd/mm/yyyy), time (HH: mm), scientific values and as well as some special formats to a spreadsheet.

2. Currency:
If we enter a financial value with the currency sign, calc assigns a currency format to the cell along with the entry.

3. Dates:
If we enter the date, that follows one of the built-In Calc number formats, such as 01/06/2018 or 01 June 2018, the program assigns a Date format that follows the pattern of the date.

4. Changing cell colours:
Select the range to format. From the Toolbar, select format and click on cells to display format cells dialog box and choose background tab. The back ground tab provide Background colourforthe cell. Select the desired colour from the colour pallets. Then click OK to make necessary changes.

5. Create a custom cell border:
We can create a cell style that includes a custom border, and can apply to that cell style when we want to display the custom border around selected cells.

• Select the properties option on the side bar (Right)
• Click cell appearance
• We can modify cell border properties

6. Conditional formatting:
We can apply conditional formatting to a cell range, a table, or a Pivot Table report. A conditional format changes the appearance of a cell range based on a condition or criteria. If the condition is true, the cell range is formatted based on that condition; if the condition is false, the cell range is not formatted based on that condition.

Changing The Alignment Of Data In Cells
There are several options to change the alignment of text (Data) in cells.

1. Text Formatting:
We can format the text in the cell in the following way.

• The font style can be changed
• The font size can be changed
• If we need bold letters, Italics, or underlined, choose from appropriate field.
• The back ground colour can be changed
• The text alignment in the cell either is left, right, center or justify
• The position in the cell ie., Top, Center or Bottom of the cell can be selected.
• The borders to the cell can choose from the appropriate field.
• Different types of borders can be given in the field.

All these actions are also given in property windows appears on the right of the work sheet.

2. Merging a range of cells:
Merged cells are’ a single cell that is created by combining two or more selected cells. When two or more adjacent horizontal or vertical cells are merged, the cells become one large cell and displayed across multiple columns or rows. The contents of cell appear in the centre of the merged cell.

3. Split a merged cell:
Select the merged cell which we want to split into two. When we select a merged cell, the merge and centre button also appears selected in the Alignment group on the Home Tab. Click merge and centre.

4. Formatting a table:
There are predefined table styles or quick styles that we can use to quickly, format a table. Select cells where the Table hasto be inserted. Then select the format option in the menu bar, in the dropdown menu select the auto format. We can select the predefined table format.

5. Headers and Footers:
In calc spreadsheet, headers and footers are lines of text that are printed at the top (Header) and bottom (footer) of each page in the menu bar. They contain descriptive text such as titles, dates, and / or page numbers and are used to add information to a printed spreadsheet. These options are available under insert option in the menu bar.

Output Reports
We can print entire or partial worksheets and work books, one at a time, or several at once.

1. Page set Up:
We can customize our output Report by editing the page set up option.

2. Print Out:
Before Printing, we have to verify print preview which gives an idea about how the print out may come. The modification can be done by this verification.

3. Defining the Print:
By default, Libre Office Calc prints all data on the current worksheet. The print area can be customized/defined by using Dialog Box option.

4. Preparation of reports using Pivot Tables:
A Pivot Table is a way to present information in a report format. A PivotTable report provides enhanced layout, attractive and formatted report with improved readability. There are two types of data table.

• One-Variable Data Table
• Two-Variable Data Table

The one variable Data Table allows us to identify a single decision variable in our model and see how changing the values for that variable affect the values calculated by one or more formulas in our model.

The two variable Data table allows us to Specify two decision variables and a variety of inputs and only a single formula.

Common Error Codes (Messages) in Libre Office Calc
Libre Office Calc provides some messages for errors of miscalculation, incorrect use of functions, invalid cell references, and values, and other user initiated mistakes. Some of the error codes/messages are given below.

Students can Download Chapter 2 Accounting for Partnership – Basic Concepts Notes, Plus Two Accountancy Notes helps you to revise the complete Kerala State Syllabus and score more marks in your examinations.

Kerala Plus Two Accountancy Notes Chapter 2 Accounting for Partnership – Basic Concepts

Summary
Partnership – Definition
The relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Features

• Number of persons – A minimum of two persons. Maximum: 10 – Banking business; others 20.
• Agreement
• Business – profit seeking and lawful
• Sharing of profits
• Agency – principal relationship
• Utmost good faith
• Unlimited liability
• No separate legal existence

Partnership deed
A document containing the terms of partnership as agreed to by the partners.
Contents of deed
Name of firm, name of partners, nature and place of business, date of commencement and duration, capital, division of profit, operation of bank accounts, interest on capital and drawings, ascertainment of goodwill, settlement of accounts, etc.

Provisions of partnership act 1932, applicable to accounting
Rules applicable in the absence of partnership deed

Profit sharing	equal
Interest on capital	no
Interest on loan	6%
Interest on drawings	no
Remuneration to partners	no

Preparation of Capital Accounts
(i) Fixed Capital:
Original capital invested by any partner remains the same unless additional capital is brought in or part of the capital is withdrawn as per agreement. Each partner will have two accounts –

• partner’s capital account
• partner’s current account. All adjustments like salary, interest on capital, interest on drawings, drawings, share of profit/loss, etc., are shown in current account. Capital account remains fixed.

Proforma of Partners’ Capital Account Partner’s Capital Account

Partner’s Current Account

(ii) Fluctuating Capital:
Only one account, i.e., capital account is maintained. All adjustments like drawings, interest on drawings, interest on capital, salary, share of profit/ loss, etc. are shown in the capital account itself.
Proforma of Partners’ Capital Account

Profit and loss appropriation account
This is a nominal account prepared to show how net profit has been distributed among the partners. This
is an extension of profit and loss account.

Journal Entries:
1. Transfer of the balance of Profit and Loss Account to
Profit and Loss Appropriation Account:
(a) If Profit and Loss Account shows a
credit balance (net profit) :
Profit and Loss A/c Dr.
To Profit and Loss Appropriation A/c.

(b) If Profit and Loss Account shows a debit balance (net loss)
Profit and Loss Appropriation A/c Dr.
To Profit and Loss A/c.

2. Interest on Capital:
(a) For crediting interest on capital to partner’s
capital account :
Interest on Capital A/c Dr.
To Partner’s Capital/ Current A/cs(individually)

(b) For transferring interest on capital to
Profit and Loss Appropriation Account :
Profit and Loss Appropriation A/c Dr.
To Interest on Capital A/c

3. Interest on Drawings:
(a) For charging interest on drawings to
partners’ capital accounts :
Partners Capital/Current A/c’s (individually) Dr.
To Interest on Drawings A/c

(b) For transferring interest on drawings to
Profit and Loss Appropriation Account :
Interest on Drawings A/c Dr.
To Profit and Loss Appropriation A/c

4. Partner’s Salary:
(a) For crediting partner’s salary to partner’s
capital account :
Salary to Partner A/c Dr.
To Partner’s Capital/CurrentA/c’s (individually)

(b) For transferring partner’s salary to
Profit and Loss Appropriation Account :
Profit and Loss Appropriation A/c Dr.
To Salary to Partner’s A/c

5. Partner’s Commission:
(a) For crediting commission to a partner,
to partner’s capital account :
Commission to Partner A/c Dr.
To Partner’s Capital/ Current A/c’s (individually)

(b) For transferring commission paid to
partners to Profit and Loss Appropriation Account.
Profit and Loss Appropriation A/c Dr.
To Commission to Partners Capital/ CurrentA/c

6. Share of Profit or Loss after appropriations:
If Profit:
Profit and Loss Appropriation A/c Dr.
To Partner’s Capital/Current A/c’s (individually)
If Loss:
Partner’s Capital/CurrentA/c’s (individually) Dr.
To Profit and Loss Appropriation A/c

The Proforma of Profit and Loss Appropriation Account is given as follows
Profit and Loss Appropriation Account:

Interest on capital
Interest on capital payed to partner’s as a compensation for their capital contribution to the firm. It is allowed at an agreed rate on the amount of capital (at the beginning and on additions) with reference to time.

Interest on drawing
Interest to be charged on the withdrawals made by the partners if it has been specifically metioned in the partnership deed. It is calculated with reference to time at an agreed rate on the amount of withdrawal.
Calculation of interest on drawings under different situations
(I) When the amount is withdrawn every month
(a) When the amount is withdrawn at the beginning of each month:
Average period = 6.5 months
Interest on drawings = Total drawings × \(\frac{6.5}{12} \times \frac{\text { Rate }}{100}\)

(b) When the amount is withdrawn at the end of each month
Average period = 5.5 months
Interest on drawings = Total drawings × \(\frac{5.5}{12} \times \frac{\text { Rate }}{100}\)

(c) When the amount is withdrawn in the middle of the month.
Average period = 6 months
Interest and drawings = Total drawings × \(\frac{6}{12} \times \frac{\text { Rate }}{100}\)

(II) When fixed amount is withdrawn quarterly
(a) If the amount is withdrawn at the beginning of each quarter.
interest on drawings= Total drawings × \(\frac{7.5}{12} \times \frac{\text { Rate }}{100}\)

(b) If the amount is withdrawn at the end of each year
Interest on drawings = Total drawing × \(\frac{4.5}{12} \times \frac{\text { Rate }}{100}\)

(III) When varying amounts are withdrawn at different intervals.
Interest on drawings = Sum of Product × \(\frac{Rate}{100} \times \frac{\text {1 }}{12}\)
Sum of Product = Withdrawal amount × Remain-ing months in the year.

Guarantee of profit to a partner
Sometimes, on admission of a new partner, the existing partners may give an assurance to the incoming partner that he shall be given a minimum amount of profit irrespective of the firm’s actual profits. This is called guarantee of profit to a partner.

The guarantee may be given either by all the partners or by one of the partners. If the share of profit of the new partner is more than the guaranteed amount, then he will get his actual share of profit.

Past Adjustments
Sometimes, after closing the books of accounts it is found that certain items are left out by mistake or have been wrongly treated. In such a case necessary adjustments are carried out in partners’ capital accounts through an account called ‘profit and loss adjustment account’.

Preparation of final accounts of a partnership firm
There is not much difference in the final accounts of a sole trading concern and that of a partnership firm. The only difference is the division of profit among the partners for which a profit and loss appropriation account has to be prepared.