Question 25 Chapter 2 of +2-Part-1
Table of Contents
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.
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Also, Check out the solved question of previous 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)
- 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
- 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
