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

Question 12 Chapter 2 of +2-A

Question 12 Chapter 2 of +2-A

12. X and Y are partners sharing profits in the ratio of 3: 2 with capitals of ₹ 8,00,000 and ₹ 6,00,000 respectively. Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of ₹ 60,000 which has not been withdrawn. Profit for the year ended 31st March 2019 before interest on capital but after charging Y’s salary amounted to ₹ 2,40,000.

The solution of Question 12 Chapter 2 of +2-A

Profit and Loss Adjustment Account A/c
for the year ended 31st March 2019
Particulars
Amount Particulars
Amount
To Manager’s Commission 15,000 By Profit and Loss A/c 2,40,000 3,00,000
 (3,00,000×5%)   Add: Y’s salary 60,000  
To Profit and Loss Appropriation A/c (B. fig) 2,85,000      
  4,00,000       4,00,000

 

Profit and Loss Appropriation Account A/c
for the year ended 31st March 2019
Particulars
Amount Particulars
Amount
To Y’s Salary A/c   60,000 By Profit and Loss Adjustment Account A/c 2,85,000
To Interest on Capital A/c *1     Add: Y’s salary  
X’s Capital 40,000      
Y’s Capital 30,000 70,000
   
To X’s Capital A/c   93,000
   
1,55,000 × 3/5        
To Y’s Capital A/c   62,000
   
1,55,000 × 2/5        
    2,85,000     2,85,000

 

 

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 = 8,00,000
Rate of Interest = 5%
Period = Whole year(So we don’t need to add period in the formula)
= 8,00,000 X 5/100
Total Interest on X’s Capital = 40,000/-
Y’s Capital = 6,00,000
Rate of Interest = 5%
Period = Whole year(So we don’t need to add period in the formula)
= 6,00,000 X 5/100
Total Interest on Y’s Capital = 30,000/-

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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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 12 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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