Question 20 Chapter 2 of Class 12 Part - 1 VK Publication

Question 20 Chapter 2 of Class 12 Part – 1

Table of Contents

The solution of Question 20 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

20. P and Q are partners sharing profits in the ratio of 3:2 with capitals of Rs. 1,00,000 and Rs. 60,000 respectively. Interest on capital is agreed at 10% per annum. Q is to be allowed an annual salary of Rs. 6,000. During the year, they withdrew Rs. 12,000 each. Profit for the year amounted to Rs. 36,000, prior to interest on capital and before charging depreciation at 10% on furniture valued Rs. 20,000 and before writing off bad debts of Rs. 1,000. Manager is to be allowed a commission of 10% after charging such commission. Prepare Partners’ Capital Accounts when: (i) Capital Accounts are fixed, (ii) Capital Accounts are fluctuating.

The solution of Question 20 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Account

Particulars	Amount	Particulars	Amount
To Depreciation on Machinery	2,000	By Profit b/d	36,000
To Bad Debt	1,000
To Manager’s Commission A/c (33,000 x 10/110)	3,000
To Profit Transferred to Profit and Loss Appropriation A/c	30,000
	36,000		36,000

Profit and Loss Appreciation Account

Particulars		Amount	Particulars	Amount
To Interest On Capital A/C:			By Profit and Loss A/c	30,000
P	10,000
Q	6,000	16,000
To Q’s Salary A/C		6,000
To Profit Transferred To Capital A/C’s
P	4,800
Q	3,200	8,000
		30,000		30,000

Case: (i) Fixed Capitals Accounts:

Advertisement-X

Partner’s Capital Account

Particulars	P Rs.	Q Rs.	Particulars	P Rs.	Q Rs.
To Balance c/d	1,00,000	60,000	By Balance b/d	1,00,000	60,000
	1,00,000	60,000		1,00,000	60,000

Partner’s Capital Account

Particulars	P Rs.	Q Rs.	Particulars	P Rs.	Q Rs.
To Drawings Account	10,000	10,000	By Balance b/d	10,000	6,000
To Balance c/d	2,800	3,200	To Salary A/C	–	6,000
			By P & L App. A/c	4,800	3,200
	14,800	15,200		14,800	15,200

(ii) Fluctuating Capitals Accounts:

Partner’s Capital Account

Particulars	P Rs.	Q Rs.	Particulars	P Rs.	Q Rs.
To Drawings Account	12,000	12,000	By Balance b/d	1,00,000	60,000
To Balance c/d	1,02,800	63,200	By Interest on Capital	10,000	6,000
			To Salary A/C	–	6,000
			By P & L App. A/c	4,800	3,200
	1,14,800	75,200		1,14,800	75,200