Question 25 Chapter 2 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 25 Chapter 2 of +2- Part-

Question 25 Chapter 2 of +2-Part-1

25. (Interest is a charge) P and Q are partners. They share profits in 2:1 ratio. As per the partnership, they are to get interested on capital @10% p.a. Their capitals were P- Rs.50,000; Q- Rs.30,000. Their profit before interest was Rs.10,100. Interest is allowed as a charge. What difference will it make if profits are Rs.7,100 only?

 

The solution of Question 25 Chapter 2 of +2 Part-1

: – 

Calculation of net profit
  Particulars
B
  a) If profits are Rs.10,100:    
  Profit before interest   10,100
  Less: Interest on Capital @ 10% – A   (5,000)
  Interest on Capital @ 10% – B   (3,000)
  Net Loss 2,100

 

Calculation of distribution of profit
  Particulars
A B
  Net Profit of Rs.2,100 being distributed in 2:1 ratio   1,400 700
       

 

Calculation of net profit
  Particulars
B
  a) If profits are Rs7,100:    
  Profit before interest   7,100
  Less: Interest on Capital @ 10% – A   (5,000)
  Interest on Capital @ 10% – B   (3,000)
  Net Loss 900

 

Calculation of distribution of profit
  Particulars
A B
  Net loss of Rs.900 being distributed in 2:1 ratio   (600) (300)
       

Note: When interest is allowed as charge, it is irrespective of the quantum of profits and is shown in Profit and Loss a/c.

 

Thanks, Please Like and share with your friends  

Comment if you have any questions.

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

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

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

 

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

2 Book 1 min - Question 25 Chapter 2 of +2 Part-1 - USHA Publication  12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

Leave a Reply