Question 3 Chapter 2 of Class 12 Part - 1 VK Publication

Question 3 Chapter 2 of Class 12 Part - 1

3. A and B were in partnership. They had agreed that interest on Capital be allowed @ 12% p.a. and interest be changed on the Drawings at the same rate . There was no other provision in their paternship deed. A presented the following Profit and Loss Appropriation Account:
Should B accept it? In case you don’t advise him to accept it , then , redraw it. Also give the necessary entry for the rectification.

The solution of Question 3 Chapter 2 of Class 12 Part - 1: -

The redrafted Profit and Loss Appropriation Account is given below:

Profit and Loss Appreciation Account

Particulars		Amount	Particulars	Amount
To Interest on Capital A/c:			By Profit and Loss A/c	77,280
A	12,000
B	6,000	18,000	By Interest on B’s Drawings	360
To Profit transferred to Capital A/cs
A	29,820
B	29,820	59,640
		77,640		77,640

Notes: (i) Interest on drawings will be charged for an average period of six months.
(ii) No salary is allowed to partner A
(iii) Profit will be shared in equal ratio by partners

Adjustment Table

Particulars	Amount already received		Amount ouggt to received
		Amount		Amount
Interest on Capitals	12,000	6,000	12,000	6,000
Salary	15,000	_	_	_
Share in Profit	30,000	15,000	28,820	29,820
	57,000	21,000	41,820	35,820
Less: Interest on Drawings	_	720	_	360
	57,000	20,280	41,820	35,460

Amount ought to be received (Cr.)	A	B
Less: Amount already received (Dr.)	41.820	35,460
Amount to be Adjusted	57,000	20,280
Donations received from the donors for Building	(15,180)	(15,180)

Profit and Loss Appreciation Account

Particulars		Dr.	Cr.
Adjustment Entry
A’s Capital A/c	Dr.	15,180
To B’s Capital A/c			15,180
(Being partners capital accounts adjusted )

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

Usha Publication - Accountancy PSEB (Class 12) - Volume I - Solution

Chapter No. 1 - Accounting Not for Profit Organisations

Chapter No. 2 - Partnership Accounts - I (Introduction)

Chapter No. 3 - Partnership Accounts - II (Goodwill: Nature and Valuation)

Chapter No. 4 - Partnership Accounts - III (Reconstitution of Partnership)

Chapter No. 5 - Partnership Accounts - IV (Admission of A Partner)

Chapter No. 6 - Partnership Accounts - V (Retirement and Death of A Partner)

Chapter No. 7 - Partnership Accounts - VI (Dissolution of Partnership Firm)

Chapter No. 8 - Company Accounts (Share Capital)

Chapter No. 9 - Company Accounts (Issue of Debentures)

Chapter No. 10 - Company Accounts (Redemption of Debentures)

Usha Publication - Accountancy PSEB (Class 12) - Volume II - Solution

Chapter No. 1 - Financial Statements of a Company

Chapter No. 2 - Financial Statement Analysis

Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size

Chapter No. 4 - Ratio Analysis

Chapter No. 5 - Cash Flow Statement

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