Question 11 Chapter 2 of +2-A - T.S. Grewal 12 Class Part

Question 11 Chapter 2 of +2-A

Table of Contents

The solution of Question 11 Chapter 2 of +2-A:

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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/-

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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

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