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Question 79 Chapter 2 of Class 12 Part - 1
79. Shankar and Jaikishan are partners with a capital of Rs.40,000 and Rs. 20,000 on which they agree to allow interest @6% p.a. Their respective share of profit is 2:3. The profits prior to interest for the year are Rs. 3,000. Calculate interest on capital and show Profit and Loss Appropriation Account when (a) interest on capital is not a charge on profits (b) interest on capital is a charge on profits.
Case (a)
Profit and Loss Appreciation Account
| Particulars |
|
Amount |
Particular |
Amount |
|---|---|---|---|---|
| To Interest On Capital A/C: | By Profit And Loss A/C | 3,000 | ||
| Shankar | 2,000 | |||
| Jaikishan | 1,000 | 3,000 | ||
| 3,000 | 3,000 |
Case (b)
Profit and Loss Appreciation Account
| Particulars |
|
Amount |
Particular |
Amount | |
|---|---|---|---|---|---|
| To Interest On Capital A/C: | By Profit And Loss A/C | 3,000 | |||
| Shankar | 2,400 | By Loss transferred to Capital A/c: | |||
| Jaikishan | 1,200 | 3,600 | Shankar | 240 | |
| Jaikishan | 360 | 600 | |||
| 3,600 | 3,600 |
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Also, Check out the solved question of all Chapters: -
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)
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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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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