Question 14 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 14 Chapter 2 of +2-A

Question 14 Chapter 2 of +2-A

14. Reema and Seema are partners sharing profits equally. The Partnership Deed provides that both Reema and Seema will get the monthly salary of Rs 15,000 each, Interest on Capital will be allowed @ 5% p.a. and Interest on Drawings will be charged @ 10% p.a. Their capitals were Rs 5,00,000 each and drawings during the year were Rs 60,000 each.
The firm incurred a loss of Rs 1,00,000 during the year ended 31st March 2018.
Prepare Profit and Loss Appropriation Account for the year ended 31st March 2018

The solution of Question 14 Chapter 2 of +2-A

Profit and Loss Appropriation Account A/c
for the year ended 31st March 2019
Particulars
Amount Particulars
Amount
To Profit and Loss A/c   1,00,000 By Interest on Drawing A/c *1   90,575
      Reema’s Capital 3,000  
      Seema’s Capital 3,000 6,000
      To Prem’s Capital A/c    
      34,750 × 3/5 47,000 1,675
      To Manoj’s Capital A/c    
      34,750 × 2/5 47,000 94,000
    1,00,000       1,00,000

Note: –
Since the firm has incurred loss, no interest on capital and salary will be allowed to the partners. However, interest in drawings will be charged from each of them @ 10% p.a. on the amounts withdrawn by them for an average period of six months.

Working Note: –

*1: -Calculation of Total Interest on X’s Capital, Y’s Capital and Z’s Capital
Interest on Drawing = Total Drawing X Rate of Interest X Period
Total Drawing = 60,000
Rate of Interest = 5%
Period = Period of drawing is not clear. So, it will be treated as during the year (So we will calculate on the basis of 6months)
= 60,000 X 10/100 X 6/12
Total Interest on Drawing = 3,000/- each.

Thanks, Please Like and share with your friends  

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)

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 14 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

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.