Question 34 Chapter 3 - Unimax Class 12 Part 1 - 2021

Question 34 Chapter 3 - Unimax Class 12 Part 1

34. A and B are partners sharing profit in the ratio of 3 : 2 with Opening Capitals of Rs. 50000 and Rs. 30000 respectively. Interest on Capital is agreed @ 6% per annum. B is to be allowed an annual salary of Rs. 2500. During the year ended 31st March, 2021 the profits of year prior to calculation of interest on Capital but after charging B’s salary amounted to Rs. 12500. A provision of 5% of the profits after charging interest on capital salary is to be made in respect of the A’s commission. Prepare an account showing the allocation of profits. Also prepare partner’s Capital Accounts and current accounts. Current account balances on 1st April, 2020 were A Rs. 2000 (Cr.) ; B Rs. 1500 (Dr.).

The solution of Question 34 Chapter 3 - Unimax Class 12 Part 1:

Profit & Loss of Appropriation A/c For the year ended 31st March., 2021

Particulars		Rs.	Particulars	Rs.
To Interest on Capital			By Net Profit	12500
- A	3000
- B	1800	4800
To Profit A/c
- A	4389
- B	2926	7315
To A’s Commission		385
		12500		12500

Partner’s Capital Accounts

Date	Particulars	A	B	Date	Particulars	A	B
31-3-21	To Balance c/d	50000	30000	1-4-2020	By Balance b/d	50000	30000

Partner’s Capital Accounts

Particulars	A	B	Particulars	A	B
To Bal b/d		1500	By Balance b/d	2000
To Bal c/d	9774	5726	By Profit & Loss App. A/c (Profit)	4389	2926
			By int. on cap.	3000	1800
			By Salary A/c	-	2500
			By Commission	385	-
	9774	7226		9774	7226

Working Notes :
(1) A’s Commission = (12500 – 3000 – 1800) 5% = Rs. 385
(2) Calculation of profit
A’s Share of profit
A’s Share of profit = 7315 x3/5= 4389
B’s Share of profit = 7315 x2/5= 2926

 

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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

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication