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

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 Interest on capital is agreed @ 5% p.a. Y is to be allowed an annual salary of ₹ 60,000 which has not been withdrawn.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/cfor 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/cfor 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/-

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. 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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