Question 18 Chapter 2 of Class 12 Part - 1 VK Publication

Question 18 Chapter 2 of Class 12 Part – 1

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The solution of Question 18 Chapter 2 of Class 12 Part – 1: –

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

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

18. Meenu and Joy are partners sharing profit in the ratio of 4:5 with capitals of Rs. 1,00,000 and Rs. 1,20,000 respectively. Interest on capital has been agreed at 10% p.a. Joy is entitled to receive a salary of Rs. 12,000 pa. They both withdrew Rs. 10,000 each during the year.
Profit made during the year was Rs. 90,000 before appropriations, depreciation on machinery @12% valued at Rs. 1,00,000 and also before providing for a provision on debtors at 10% valued at Rs. 40,000. Manager is to be allowed a commission of 10% after charging such commission. Prepare Profit and Loss Appropriation Account and Partners’ Capital Accounts when capitals are (i) fixed, and (ii) fluctuating.

The solution of Question 18 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Account

Particulars	Amount	Particulars	Amount
To Depreciation on Machinery	12,000	By Profit b/d	90,000
To Provision for Doubtful Debts	4,000
To Manager’s Commission A/c (74,000 x 10/110)	6,728
To Profit Transferred to Profit and Loss Appropriation A/c	67,272
	90,000		90,000

Profit and Loss Appreciation Account

Particulars		Amount	Particulars	Amount
To Interest On Capital A/C:			By Profit and Loss A/c	67,272
Meenu	10,000
Joy	12,000	22,000
To Joy’s Salary A/C		12,000
To Profit Transferred To Capital A/C’s
Meenu	14,788
Joy	18,484	33,272
		67,272		67,272

(i) When Capitals are fixed

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Partner’s Capital Account

Particulars	Meenu Rs.	Joy Rs.	Particulars	Meenu Rs.	Joy Rs.
To Balance c/d	1,00,000	1,20,000	By Balance b/d	1,00,000	1,20,000
	1,00,000	1,20,000		1,00,000	1,20,000

Partner’s Capital Account

Particulars	Meenu Rs.	Joy Rs.	Particulars	Meenu Rs.	Joy Rs.
To Drawings Account	10,000	10,000	By Balance b/d	10,000	12,000
To Balance c/d	14,788	32,484	To Joy’s Salary A/C	–	12,000
			By P & L App. A/c	14,788	18,484
	24,788	42,484		24,788	42,484

(ii) When Capitals are fluctuating:

Partner’s Capital Account

Particulars	Meenu Rs.	Joy Rs.	Particulars	Meenu Rs.	Joy Rs.
To Drawings Account	10,000	10,000	By Balance b/d	1,00,000	1,20,000
To Balance c/d	1,14,788	1,52,484	By Interest on Capital	10,000	12,000
			To Joy’s Salary A/C	–	12,000
			By P & L App. A/c	14,788	18,484
	1,24,788	1,62,484		1,24,788	1,62,484