Question 11 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 11 Chapter 2 of +2-A

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/-

 

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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)

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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2 Book 1 min - Question 11 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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