Q.No.27 | Chapter 2 – Accounting for Partnership Firms: Fundamentals | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Particulars		Amount	Particulars			Amount
To Salary to Partners A/c			By Profit and Loss Adjustment A/c			4,20,000
X’s 10,000 X 12	1,20,000
Y’s	25,000	1,45,000
To commission A/c
X’s *1	27,500
Y’s *2	22,500	50,000
To Profit Transferred to *3
X’s Capital	1,12,500
Y’s Capital	1,12,500	2,25,000
		4,20,000				4,20,000

 

Working Note: -

*1: - Calculation of commission to X
Net Profit after charging Partner’s Salary = Rs 4,20,000 – 1,45,000 = 2,75,000
Commission to X = 10% of the Net Profit before charging such commission

=2,75,000 X	10
	100

Commission to X =27,500/-

*1: - Calculation of commission to Y
Net Profit after charging Partner’s Salary and Commission = Rs 4,20,000 – 1,45,000 – 27,500 = 2,47,500/-
Commission to Y = 10% of the Net Profit After charging such commission

Where the commission is charged after such on profit then there will different way of the calculation shown as follow:

Net Profit before charging a commission	X	Rate
		100 + Rate

=2,47,500	X	10
		100 + 10

 

=2,47,500	X	10
		110

Commission to Y=22,500/-
*3: -Calculation of share of profit of A’s, B’s, C’s, and D’s.
Profit Sharing Ratio = 1:1
Net Profit after Commission = 2,25,000

Profit share of X’s	=2,25,000 X 1/2
	=1,12,500/-

 

Profit share of Y’s	=1,50,000 X 1/2
	=1,12,500/-

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Also, Check out the solved question of previous Chapters: -

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 – Company Accounts –  Accounting for Share Capital
• Chapter No. 9 – Company Accounts – Issue of Debentures
• Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis 
• Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
• Chapter No. 4 – Accounting Ratios
• Chapter No. 5 – Cash Flow Statement

 

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