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

Question 2 Chapter 2 of Class 12 Part – 1

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The solution of Question 2 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

2. A and B are partners in a firm. Their partnership deed provides the following only:
Interest on Capital to be allowed @ 12%
Interest on Drawings to be charged @ 12% p.a.
They presented the following Profit and Loss Appropriation Account:
You are required to rectify the mistake and prepare revised Profit and Loss Appropriation Account.

Particulars		Rs.	Particulars	Rs.
To Interest on Capitals @ 12% p.a.			By Profit and Loss A/c	49,280
A on 40,000		4,800	By interest on Drawings of B @ 12% p.a. on 6,000	720
B on 20,000		2,400
To Interest on B’s Loan @ 4% p.a.		400
To Salary To A ( for working as manager)		6,000
To Profit:
A 2/3	27,300
B 1/3	9,100	36,400
		50,000		50,000

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

Rectification of mistakes:
(i) Interest on B’s Loan is to be provided @ 6% pa. and not @ 4% p.a.
(ii) No salary is to be given to partner A for working as manager in the partnership deed
(iii) Cut Profit will be shared by partners in equal ratio.
(iv) Interest on drawings will be charged for an average period of 6 months. Revised Profit and Loss Appropriation Account is given below:

Profit and Loss Appreciation Account

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Particulars		Amount	Particulars	Amount
To Interest on Capital A/c:			By Profit and Loss A/c	48,680
A 12% on 40,000		4,800	[49,280-600 ( Interest on B’s Loan @ 6% p.a.)]
B12% on 20,000		2,400	By Interest on B’s Drawings @12% pa. on Rs. 6,000 for six months	360
To Profit transferred to Capital A/cs
A	20,920
B	20,920	41,840
		49,040		49,040