Question 16 Chapter 2 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 16 Chapter 2 of +2- Part-

Question 16 Chapter 2 of +2-Part-1

16. (Capital a/c’s/Interest on Drawings) Prepare Capital accounts of partners Muthu and Krishnan from the following information, assuming that their capitals are fluctuating:

  Muthu Krishnan
Capital on 1-4-18 50,000 35,000
Drawings during 2018-19 2,400 1,200
Interest on Capital  6% 6%
Interest on Drawings 6% 6%
Share in profits for 2018-19 7,000 5,000
Salary …. 1,800
Commission 1,000 …..

 

The solution of Question 16 Chapter 2 of +2 Part-1

: – 

Partners’ Capital Accounts 
Particulars
Muthu Krishnan Particulars
Muthu Krishnan
To Drawings A/c   2,400 1,200 By Balance B/d   50,000 35,000
To Interest on Drawings A/c   78 33 By Share in profits   7,000 5,000
        By Interest on Capital A/c   3,000 2,100
        By Salary   1,800
        By Commission   1,000
To Balance c/d   58,522 42,667        
               
               
    61,000 43,900
    61,000 43,900

 

Working Notes: –
Calculation of interest on partner’s Drawings
If partners withdrawal the same amount of drawing on a regular basis then we can calculate the interest on drawing with help of following formula: –
Interest on Drawing = Total Drawings X Rate of Interest X Period/12 Months
Rate of Interest = 6%
Period = the period/time will be calculated with the help of following formula: –

Period = Time left after 1st withdrawal + Time left after Last withdrawal
2

1. Calculation of interest on Muthu’s Drawings:

Muthu’s withdrawal at the beginning of every month = 200 p.m. Therefore, total drawings of the year= Rs.2,400.
It means 1st withdrawal has made on 01-04-2018
So, Time left from 1-4-2018 to 1-3-19 in 12 Months
And last withdrawal has made on 1-3-2019
So, Time left from 1-3-2019 to 31-3-2019 is 1 month.

Now, put this time period in the formula

Period = 11 + 1
2
Period = 13
2
Period = 6.5

Total Drawings = 2,400

Interest on Drawing = 2,400 X 6 X 6.5
100 12
             
Interest on Drawing = 78        

2. Calculation of interest on Krishnan’s Drawings:

Muthu’s withdrawal at the end of every month = 100 p.m. Therefore, total drawings of the year = Rs.1,200.
It means 1st withdrawal has made on 31-04-2018
So, Time left from 31-4-2018 to 31-3-19 in 11 Months
And last withdrawal has made on 31-3-2019
So, Time left from 31-1-3-2019 to 31-3-2019 is 0 months.
Now, put this time period in the formula:

Period = 11 + 0
2
Period = 11    
2
Period = 5.5

Total Drawings = 1,200

Interest on Drawing = 1,200 X 6 X 5.5
100 12
             
Interest on Drawing = 33        

 

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

  • Chapter No. 1 – Accounting Not for Profit Organisations
  • Chapter No. 2 – Partnership Accounts – I
  • Chapter No. 3 – Partnership Accounts – II (Introduction)
  • Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)
  • Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)
  • Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)
  • Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)
  • Chapter No. 8 – Company Accounts (Share Capital)
  • Chapter No. 9 – Company Accounts (Issue of Debentures)
  • Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

  • Chapter No. 1 – Financial Statements of a Company (Balance Sheet Only)
  • Chapter No. 2 – Techniques of Financial Statement Analysis
  • Chapter No. 3 – Ratio Analysis 
  • Chapter No. 4 – 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 Part-1 - USHA Publication  12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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