Question 19 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 19 Chapter 2 of +2-A

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)

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

 

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2 Book 1 min - Question 19 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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