Question 16 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 16 Chapter 2 of +2-A

Question 16 Chapter 2 of +2-A

16. Amar and Bimal entered into a partnership on 1st April 2018 contributing ₹ 1,50,000 and ₹ 2,50,000 respectively towards the capital. The Partnership Deed provided for interest on capital @ 10% p.a. It also provided that Capital Accounts shall be maintained following Fixed Capital Accounts method. The firm earned a net profit of ₹ 1,00,000 for the year ended 31st March 2019.
Pass the Journal entry for interest on capital.

The solution of Question 16 Chapter 2 of +2-A

Date Particulars
L.F. Debit Credit
April 1 Profit and Loss Appropriation A/c Dr   40,000  
  To Amar’s Capital A/c       15,000
  To Bimal’s Capital A/c       25,000
  (Being interest on capital credited to partners capital account)        

Working Note: –

*1: -Calculation of Total Interest on Amar’s Capital, and Bimal’s Capital
Interest on Capital = Capital X Rate of Interest X Period
Amar’s Capital = 1,50,000
Rate of Interest = 10%
Period = Whole year(So we don’t need to add period in the formula)
= 1,50,000 X 10/100
Total Interest on Amar’s Capital = 15,000/-

Bimal’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 Bimal’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

 

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

2 Book 1 min - Question 16 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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