Q.No.81 | Chapter 2 – Accounting for Partnership Firms: Fundamentals | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Liabilities		Amount	Assets		Amount
			By Profit and Loss A/c		40,000
To Profit Transferred to *2
A's Capital A/c	19,500
B's Capital A/c	15,500
C's Capital A/c	5,000	40,000
		40,000			40,000

Working Note: -

Calculation of Actual Amount of Interest on A's, B's, & C's Capital
Profit for 2018= 40,000
Profit-sharing ratio 5: 4: 1

Interest on A's Capital	=	40,000	X	5
				10

Interest on A's Capital = 20,000/-

Interest on B's Capital	=	40,000	X	4
				10

Interest on B's Capital = 16,000/-

Interest on C's Capital	=	40,000	X	1
				10

Interest on C's Capital = 4,000 /-

C's Actual Profit Share i. e. Rs 4,000 is less than his Minimum Guaranteed Profit i. e. Rs 5,000
Deficiency in C's Profit Share = = 5,000 − 4,000 = Rs 1,000
This deficiency is to be borne by A and B equally.
This deficiency of Rs 1,000 is to be borne by A and B equally.

A's Share of Profit	=	1,000	X	1
				2

A's Share of Profit = 500

B's Share of Profit	=	1,000	X	1
				2

B's Share of Profit= 500


Now, Final distributed among the partners

A's Share of Profit	=	20,000	-	500	=19,500
B's Share of Profit	=	16,000	-	500	=15,500
C's Share of Profit	=	4,000	+	1,000	=5,000

 

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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