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Question 32 Chapter 3 - Unimax Class 12 Part 1
32. A and B are partners sharing profit in proportion of 1/10th and 3/10th with capitals of Rs. 15000 and Rs. 10000 respectively as on 1st Jan., 2021. 5% interest was agreed to be calculated on the capital of each partner and B is to be allowed an annual salary of Rs. 2400 which has not been withdrawn. During the year 2021, A withdrew Rs. 1200 and B Rs. 2000 in anticipation of profits. Profits for the year prior to calculation of interest on capital but after charging B’s salary amounted to Rs. 8000. A provision of 8% of the profits after charging interest and salary but before charging any commission is to be made in respect of commission to A.
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(1)The Profit and Loss Appropriation Account showing the allocation of profits.
(2)Partners’ Capital Accounts when Capitals are fluctuating.
Profit & Loss of Appropriation A/c For the year ended Dec. 31, 2021
| Particulars | Rs. | Particulars | Rs. | |
|---|---|---|---|---|
| To B’s salary | 2400 | By Net Profit (Before Charging Salary) | 10400 | |
| To A’s Commission | 540 | |||
| To Interest on Capital | ||||
| - A | 750 | |||
| - B | 500 | 1250 | ||
| To Profit transferred to capital A/c | ||||
| - A | 4347 | |||
| - B | 1863 | 6210 | ||
| 10400 | 10400 |
Capital Accounts
| Particulars | A | B | Particulars | A | B |
|---|---|---|---|---|---|
| To Balance c/d | 19437 | 12763 | By Balance b/d | 15000 | 10000 |
| To drawings A/c | 1200 | 2000 | By Interest on capital A/c | 750 | 500 |
| By Commission A/c | 540 | - | |||
| By Salary A/c | - | 2400 | |||
| By Profit A/c | 4347 | 1863 | |||
| 20637 | 14763 | 20637 | 14763 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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