Question 19 Chapter 2 of +2-A
19. Anita and Ankita are partners sharing profits equally. Their capitals, maintained following Fluctuating Capital Accounts Method, as on 31st March, 2018 were ₹ 5,00,000 and ₹ 4,00,000 respectively. Partnership Deed provided to allow interest on capital @ 10% p.a. The firm earned net profit of ₹ 2,00,000 for the year ended 31st March, 2019.
Pass the Journal entry for interest on capital.
The solution of Question 19 Chapter 2 of +2-A:
| Date | Particulars |
L.F. | Debit | Credit | |
| April 1 | Profit and Loss Appropriation A/c | Dr | 90,000 | ||
| To Anita’s Capital A/c | 50,000 | ||||
| To Ankita’s Capital A/c | 40,000 | ||||
| (Being interest on capital credited to partners capital account) | |||||
Working Note:
*1: -Calculation of Total Interest on Anita’s Capital, and Ankita’s Capital
Interest on Capital = Capital X Rate of Interest X Period
Anita’s Capital = 5,00,000
Rate of Interest = 5%
Period = Whole year(So we don’t need to add period in the formula)
= 5,00,000 X 10/100
Total Interest on Anita’s Capital = 50,000/-
Ankita’s Capital = 4,00,000
Rate of Interest = 5%
Period = Whole year(So we don’t need to add period in the formula)
= 4,00,000 X 10/100
Total Interest on Ankita’s Capital = 40,000/-
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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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
