Q.No.46 | Chapter 2 – Accounting for Partnership Firms: Fundamentals | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

The solution of Question 46 Chapter 2 of +2-A

Profit and Loss Appropriation Account for the year ended 31st March 2019

Expenditure		Amount	Income			Amount
To Interest on Capital A/c *1			By Profit and Loss A/c			50,000
A's Capital A/c	3,000
B's Capital A/c	1,800	4,800
To B’s Salary A/c 500 X 12		6,000
To Partner’s Commission A/c *2
A's Capital A/c	6,000
B's Capital A/c	1,581	7,581
To Profit Transferred to *3
A's Capital A/c	23,714
B's Capital A/c	7,905	31,619
		50,000				50,000

Partners’ Capital Accounts for the year ended 31st March 2019

Particulars	Sajal	Kajal	Particulars	Sajal	Kajal
To Drawings A/c	8,000	6,000	By Balance B/d	50,000	50,000
			By Interest on Capital A/c *1	3,000	1,800
			By Commission A/c	6,000	1,581
			By Salary A/c	-	6,000
			By P/L Appropriation A/c	23,714	7,905
To Balance c/d	74,714	41,286
	82,714	47,286		82,714	47,286

 

Working Note: -

*1 Calculation of Interest on A's & B's Capital
Interest on Capital= Opening Capital X Rate of Interest

Interest on A's Capital	=	50,000	X	5
				100

Interest on A's Capital  = 3,000/-

Interest on B's Capital	=	30,000	X	6
				100

Interest on B's Capital  = 1,800/-

*2 Calculation of Commission to Partners

Commission to A	=	2% on Turnover
Turnover	=	3,00,000

Commission to A	=	3,00,000	X	2
				100

Commission to A = 6,000/-

Commission to B	=	5% on Profits after all Expense including such Commission
Profit after all Expense	=	50,000 − 4,800 − 6,000 − 6,000 = Rs 33,200

Commission to B	=	Profit after all Expense	X	Rate
				100 + Rate

Commission to B	=	33,200	X	5
				100 + 5

Commission to B	=	33,200	X	5
				105

Commission to B = 1,581/- (app.)

*3: -Calculation of share of profit of A's & B's

Profit-Sharing Ratio = 3: 1
Net Profit after interest & Salary = 31,619

Profit share of A	=	31,619 X 3/4
Profit share of A	=	23,714/-

 

Profit share of B	=	31,619 X 1/4
Profit share of B	=	7,905/-

Comment if you have any questions.

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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