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Question 9 Chapter 2 of +2-A
9. Bat and Ball are partners sharing the profits in the ratio of 2 : 3 with capitals of ₹ 1,20,000 and ₹ 60,000 respectively. On 1st October 2018, Bat and Ball gave loans of ₹ 2,40,000 and ₹ 1,20,000 respectively to the firm. Bat had allowed the firm to use his property for business for a monthly rent of ₹ 5,000. The loss for the year ended 31st March 2019 before rent and interest amounted to ₹ 9,000. Show the distribution of profit/loss.
Profit and Loss Appropriation Account A/c for the year ended 31st March 2019
| Particulars |
Amount | Particulars |
Amount | |
|---|---|---|---|---|
| To Profit and Loss A/c | 9,000 | By Bat’s Capital A/c | 31,920 | |
| To Rent A/c (5000 X 12) | 60,000 | 79,800 × 2/5 | ||
| To Interest on Bat’s Loan | 7,200 | By Ball’s Capital A/c | 47,880 | |
| To Interest on Ball’s Loan |
3,600 |
79,800 × 3/5 | ||
| 79,800 | 79,800 | |||
Working Note: -
Calculation of Total Interest on Bat’s Loan
Interest on Loan from Bat = Value of Loan X Rate of Interest X Period
Value of Loan = 2,40,000
Rate of Interest = 6%
Period = from 01/10/18 to 31/03/19 i.e. 6 months
(Date of Loan Taken to the end of Financial year.)
= 2,40,000 X 6/100 X 6/12
Total Interest on A’s Loan = 7,200/-
Calculation of Total Interest on Ball’s Loan
Interest on Loan from Ball = Value of Loan X Rate of Interest X Period
Value of Loan = 1,20,000
Rate of Interest = 6%
Period = from 01/10/18 to 31/03/19 i.e. 6 months
(Date of Loan Taken to the end of Financial year.)
= 1,20,000 X 6/100 X 6/12
Total Interest on B’s Loan = 3,600/-
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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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