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Question 21 Chapter 2 of Class 12 Part – 1 VK Publication

Question 21 Chapter 2 of Class 12 Part - 1 VK Publication
Question 21 Chapter 2 of Class 12 Part - 1 VK Publication

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Question 21 Chapter 2 of Class 12 Part – 1

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21. Suchi and Ruchi are in partnership towards which they have contributed Rs. 6,00,000 each The profit for the year ended 31st March, 2018 was Rs. 5,00,000 before allowing interest on partner’s loan. Show the distribution of profit after considering that the loan provided by Suchi amounted to Rs. 2,00,000. Interest on capital has to be provided at 12% pa Drawing made by the partners were Rs. 50,000 each on which interest at 6 p.a. has to be provided. Ruchi is entitled to a commission on sales (Rs. 45,00,000) at 1%. It has also been a between the partners that 20% of the divisible profits is to be kept in Reserve Account.
Record the above in a Profit and Loss Appropriation Account.

The solution of Question 21 Chapter 2 of Class 12 Part – 1: –

Profit and Loss Account

Particulars 
 
AmountParticulars 
 
Amount
To Interest On Partner’s Loan A/C12,000By Profit b/d5,00,000
To Profit Transferred to Profit and Loss Appropriation A/c4,88,000  
 5,00,000 5,00,000

Profit and Loss Appreciation Account

Particulars 
 
AmountParticulars 
 
Amount
To Interest On Capital A/C:  By Profit and Loss A/c 30,000
Suchi72,000 By Interest On Drawings Account:  
Ruchi72,0001,44,000Suchi1,500 
To Ruchi’s Salary A/C 45,000Ruchi1,5003,000
To Reserve A/C 60,400   
To Profit Transferred To Capital A/C’s     
Suchi1,20,800    
Ruchi1,20,8002,41,600   
  4,91,000  4,91,000

Working Notes:
(i). If a partner has given loan to the firm and the rate of interest on such loan has not been given in the question, then as per the Indian Partnership Act, interest @ 6% p.a. is to be allowed on such loan.
(ii). Since interest on partner’s loan is treated as a charge against profit, it is debited to Profit and Loss Account.
(iii). Since the date of drawings is not given, interest on drawings will be calculated for an average period, i.e., six months.
(iv). Amount transferred to Reserve has been calculated at 20% of Rs. 3,02,000 (i.e. 4,88,000 + 3,000 – 1,44,000 – 45,000).

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Also, Check out the solved question of all Chapters: –

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

Chapter No. 1 – Accounting Not for Profit Organisations

Chapter No. 2 – Partnership Accounts – I (Introduction)

Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)

Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)

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Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)

Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)

Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)

Chapter No. 8 – Company Accounts (Share Capital)

Chapter No. 9 – Company Accounts (Issue of Debentures)

Chapter No. 10 – Company Accounts (Redemption of Debentures)

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

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Chapter No. 1 – Financial Statements of a Company

Chapter No. 2 – Financial Statement Analysis

Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size

Chapter No. 4 – Ratio Analysis

Chapter No. 5 – Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms 

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