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Question 26 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 26 Chapter 2 of +2-A
Question No.26 - Chapter No.2 - T.S. Grewal +2 Book 2019-Solution

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Question 26 Chapter 2 of +2-A

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26. A, B, C, and D are partners in firm sharing profits as 4 : 3: 2: 1 respectively. It earned a profit of 1,80,000 for the year ended 31st March 2018. As per the Partnership Deed, they are to charge a commission @ 20% of the profit after charging such commission which they will share as 2 : 3: 2 : 3. You are required to show appropriation of profits among the partners.

The solution of Question 26 Chapter 2 of +2-A:

Profit and Loss Appropriation Account A/c
for the year ended 31st March 2019
Particulars
AmountParticulars
Amount
To commission A/c *1  By Profit and Loss Adjustment A/c 1,80,000
A’s6,000    
B’s9,0007,800   
C’s6,000    
D’s9,00030,000   
To Profit Transferred to *2     
A’s Capital60,000    
B’s Capital45,000    
C’s Capital30,000    
D’s Capital15,0001,50,000   
  1,80,000   1,80,000

 

Working Note: –

Calculation of commission to all Partners
Net Profit before charging commission = Rs 1,80,000
Commission to all partners = 20% of the Net Profit After charging such commission

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Where the commission is charged after such on profit then there will different way of the calculation shown as follow:

=Net Profit before charging a commission x Rate
100 + Rate
=1,80,000 X20
100 + 20
=1,80,000 X20
120

Commission to Z=30,000/-

Calculation of commission to every partner

Commission sharing Ratio = 2:3:2:3 (Given)

Total Commission xSingle partner share
Total of ratio
Commission to A     =30,000 x 2
10

=6,000/-

Commission to B     =30,000 x 3
10

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=9,000/-

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Commission to C      =30,000 x 2
10

=6,000/-

Commission to D     =30,000 x 3
10

=9,000/-

*2: -Calculation of share of profit of A’s, B’s, C’s, and D’s.
Profit-Sharing Ratio = 4:3:2:1
 Profit after Commission = 1,50,000
The profit share of A’s=1,50,000 X 4/10
=60,000/-
 Profit share of B’s=1,50,000 X 3/10
=45,000/-
Profit share of C’s=1,50,000 X 2/10
=30,000/-
Profit share of D’s=1,50,000 X 1/10
=15,000/-

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

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

 

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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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