Question 26 Chapter 2 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 26 Chapter 2 of +2- Part-

Question 26 Chapter 2 of +2-Part-1

26. (Interest on Capital/Drawings & Profits given) From the following balance sheet of Rich and Poor, calculate interest on capital @10% p.a. for the year ended 31-3-17.

Balance Sheet
Liabilities Amount Assets Amount 
Rich’s Capital 20,000 Sundry Assets 42,000
Poor’s Capital 16,000 Drawings – Rich 2,000
Profit & Loss Appropriation a/c (2016-17) 8,000    
       
  44,000   44,000

 

The solution of Question 26 Chapter 2 of +2 Part-1

: – 

Calculation of Capital as on 1st April 2016
  Particulars
A B
  Capital as on 31st March 2017   20,000 16,000
  Add:      
  Drawings during the year (Poor)   5,000
  Rich’s Drawings (3,000-2,000)(WN1)   1,000
  Less:      
  Share in Profit (12,000-8,000)(WN2)   (-2000) (-2000)
  Capital as on 31st March 2016   19,000 19,000
  Interest on Capital @10% p.a. 1,900 1,900

 

Working Note:

1. Rich’s drawings appearing in B/S Rs.2,000 means that they are still not adjusted out of total drawings of Rs.3,000. Hence, Only Rs.1,000 (i.e. 3,000-2,000) drawings are added back which have already been adjusted.

2. Just like drawings, profits are also not adjusted to the Rs.8,000 appearing in B/S. So, only profit already adjusted i.e. Rs.12,000-8,000 = Rs.4,000 are to be adjusted for calculating opening capital.

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

  • Chapter No. 1 – Accounting Not for Profit Organisations
  • Chapter No. 2 – Partnership Accounts – I
  • Chapter No. 3 – Partnership Accounts – II (Introduction)
  • Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)
  • Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)
  • Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)
  • Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)
  • 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 (Balance Sheet Only)
  • Chapter No. 2 – Techniques of Financial Statement Analysis
  • Chapter No. 3 – Ratio Analysis 
  • Chapter No. 4 – Cash Flow Statement

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

2 Book 1 min - Question 26 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

This site uses Akismet to reduce spam. Learn how your comment data is processed.