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Question 46 Chapter 2 of Class 12 Part – 1 Usha Publication
46. (Profit and loss Appropriation a/c, Fixed and Fluctuating Capital a/c’s) On 1st April, 2016 A and B entered in a partnership contributing Rs.24,000 and Rs.10,000 respectively. According to the deed, the interest on capital is to be allowed and on drawings to be charged @15% p.a. A and B shall receive a monthly salary of Rs.2,000 each. A is entitled to 2/5 of profits. During the year, the following transactions took place:
(a) On 1st October, 2016 A withdrew (on permanent basis)Rs.8,000 from his capital and B introduced Rs.4,000 as additional capital.
(b) The drawings of A and B were Rs.12,000 each drawn at different intervals of time and the interest corresponding to these drawings were Rs. 675 and Rs.450 respectively.
(c) The profit for the year before any adjustment is made was Rs.60,000.
Prepare the profit and loss appropriation account and the necessary accounts assuming that:
(i) The capitals are fluctuating.
(ii) The capitals are fixed.
We are providing a solution of Question 46 Chapter 2 of Class 12 Part - 1 Usha Publication in two formats. one is in Video format and another is in article format. Check out both formats as follows:
The video consists solution of questions number from 46 to 49 in Chapter No. 2 class 12 of Usha publication. To check the direct solution of question no. 46 from the following video by using time stamps of the video.
Profit and Loss App. A/c
| Particulars |
Amount | Particulars |
Amount | ||
|---|---|---|---|---|---|
| To Interest on capital - A | 3,000 | By Profit b/d | 60,000 | ||
| -B | 1,800 | 4,800 | By interest on drawings: | ||
| To salary- A | 24,000 | -A | 675 | ||
| -B | 24,000 | 48,000 | -B | 450 | 1,125 |
| To Net profit transferred to Capital a/cs | |||||
| -A (3/5) | 4,995 | ||||
| -B (2/5) | 3,330 | 8,325 | |||
| 61,125 | 61,125 | ||||
(a)If capitals are fluctuating :
| Partners’ Current A/c | |||||||
| Particulars |
A | B | Particulars |
A | B | ||
|---|---|---|---|---|---|---|---|
| To Cash A/c | 8,000 | - | By Balance B/d | 24,000 | 10,000 | ||
| To Drawings A/c | 12000 | 12000 | By Cash | - | 4,000 | ||
| To Interest on Drawings A/c | 675 | 450 | By Interest on Capital A/c | 3,000 | 1,800 | ||
| By Salary | 24,000 | 24,000 | |||||
| By P&L Appropriation A/c | 4,995 | 3,330 | |||||
| To Balance c/d | 35,320 | 30,680 | |||||
| 55,995 | 43,130 |
55,995 | 43,130 | ||||
(b)If capitals are fixed :
| Partners’ Capital A/c | |||||||
| Particulars |
A | B | Particulars |
A | B | ||
|---|---|---|---|---|---|---|---|
| To Cash A/c | 8,000 | - | By Balance B/d | 24,000 | 10,000 | ||
| By Cash | - | 4,000 | |||||
| To Balance c/d | 16,000 | 14,000 | |||||
| 24,000 | 14,000 |
24,000 | 14,000 | ||||
| Partners’ Current A/c | |||||||
| Particulars |
A | B | Particulars |
A | B | ||
|---|---|---|---|---|---|---|---|
| To Drawings A/c | 12,000 | 12,000 | By Interest on Capital A/c | 3,000 | 1,800 | ||
| To Interest on Drawings A/c | 675 | 450 | By Salary | 24,000 | 24,000 | ||
| By P&L Appropriation A/c | 4,995 | 3,330 | |||||
| To Balance c/d | 19,320 | 16,680 | |||||
| 31,995 | 29,130 |
31,995 | 29,130 | ||||
Working Note: -
Calculation of Interest on Partners’ Capital:
| Amount |
|
|---|---|
| A | |
| On 24,000 for ½ year: | 1,800 |
| On 16,000 for ½ year: | 1,200 |
| 3,000 | |
| Amount |
|
|---|---|
| B | |
| On 10,000 for ½ year: | 750 |
| On 14,000 for ½ year: | 1,050 |
| 1,800 |
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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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