Question 11 Chapter 2 of +2-A
Profit and Loss Appropriation Account
11. X, Y and Z are partners in a firm sharing profits in 2 : 2 : 1 ratio. The fixed capitals of the partners were : X ₹5,00,000; Y ₹ 5,00,000 and Z ₹ 2,50,000 respectively. The Partnership Deed provides that interest on capital is to be allowed @ 10% p.a. Z is to be allowed a salary of ₹ 2,000 per month. The profit of the firm for the year ended 31st March, 2018 after debiting Z’s salary was ₹ 4,00,000.
Prepare Profit and Loss Appropriation Account.
The solution of Question 11 Chapter 2 of +2-A:
| Profit and Loss Appropriation Account A/c for the year ended 31st March 2019 |
||||
| Particulars |
Amount | Particulars |
Amount | |
| To Interest on X’s Capital *1 | 50,000 | By Profit and Loss A/c (Net Profit) | 4,00,000 | |
| To Interest on Y’s Capital | 50,000 | |||
| To Interest on Z’s Capital | 25,000 | |||
| To X’s Capital A/c | 1,10,000 |
|||
| 2,75,000 × 2/5 | ||||
| To Y’s Capital A/c | 1,10,000 | |||
| 2,75,000 × 2/5 | ||||
| To Z’s Capital A/c |
55,000 |
|||
| 2,75,000 × 1/5 |
||||
| 4,00,000 | 4,00,000 | |||
Working Note: –
*1: -Calculation of Total Interest on X’s Capital, Y’s Capital and Z’s Capital
Interest on X’s Capital = Capital X Rate of Interest X Period
X’s Capital = 5,00,000
Rate of Interest = 10%
Period = Whole year(So we don’t need to add period in the formula)
= 5,00,000 X 10/100
Total Interest on X’s Capital = 50,000/-
Y’s Capital = 5,00,000
Rate of Interest = 10%
Period = Whole year(So we don’t need to add period in the formula)
= 5,00,000 X 10/100
Total Interest on Y’s Capital = 50,000/-
Z’s Capital = 2,50,000
Rate of Interest = 10%
Period = Whole year (So we don’t need to add period in the formula)
= 2,50,000 X 10/100
Total Interest on Z’s Capital = 25,000/-
Thanks, Please Like and share with your friends
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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
