# Question 13 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 13 Chapter 2 of +2-A

13. Prem and Manoj are partners in a firm sharing profits in the ratio of 3 : 2. The Partnership Deed provided that Prem was to be paid salary of ₹ 2,500 per month and Manoj was to ger a commission of ₹ 10,000 per year. Interest on capital was to be allowed @ 5% p.a. and interest on drawings was to be charged @ 6% p.a. Interest on Prem’s drawings was ₹ 1,250 and on Manoj’s drawings was ₹ 425. Interest on Capitals of the partners were ₹ 10,000 and ₹ 7,500 respectively. The firm earned a profit of ₹ 90,575 for the year ended 31st March 2018.
Prepare Profit and Loss Appropriation Account of the firm.

The solution of Question 13 Chapter 2 of +2-A

 Profit and Loss Appropriation Account A/cfor the year ended 31st March 2019 Particulars Amount Particulars Amount To Prem’s Salary A/c 30,000 By Profit and Loss Account A/c(net Profit) 90,575 (Rs 2,500 × 12) To Commission to Manoj 10,000 To Interest on Drawing A/c *1 To Interest on Capital A/c *1 Prem’s Capital 1,250 Prem’s Capital 10,000 70,000 Manoj’s Capital 425 1,675 Manoj’s Capital 7,500 To Prem’s Capital A/c 20,850 34,750 × 3/5 To Manoj’s Capital A/c 13,900 34,750 × 2/5 34,750 92,250 92,250

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