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Question 27 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 27 Chapter 2 of +2-A
Question No.27 - Chapter No.2 - T.S. Grewal +2 Book 2019-Solution

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Question 27 Chapter 2 of +2-A

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27. X and Y are partners in a firm. X is entitled to a salary of 10,000 per month and commission of 10% of the net profit after partners’ salaries but before charging a commission. Y is entitled to a salary of 25,000 p.a. and commission of 10% of the net profit after charging all commission and partners’ salaries. Net profit before providing for partners’ salaries and commission for the year ended 31st March 2019 was 4,20,000. Show the distribution of profit.

The solution of Question 27 Chapter 2 of +2-A:

Profit and Loss Appropriation Account A/c
for the year ended 31st March 2019
Particulars
AmountParticulars
Amount
To Salary to Partners A/c  By Profit and Loss Adjustment A/c 4,20,000
X’s 10,000 X 121,20,000    
Y’s25,0001,45,000   
To commission A/c     
X’s *127,500    
Y’s *222,50050,000   
To Profit Transferred to *3     
X’s Capital30,000    
Y’s Capital15,0002,25,000   
  4,20,000   4,20,000

 

Working Note: –

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*1: – Calculation of commission to X
Net Profit after charging Partner’s Salary = Rs 4,20,000 – 1,45,000 = 2,75,000
Commission to X = 10% of the Net Profit before charging such commission

=2,75,000 X10
100

Commission to X =27,500/-

*1: – Calculation of commission to Y
Net Profit after charging Partner’s Salary and Commission = Rs 4,20,000 – 1,45,000 – 27,500 = 2,47,500/-
Commission to Y = 10% of the Net Profit After charging such commission

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 commissionXRate
100 + Rate
=2,47,500X10
100 + 10

 

=2,47,500X10
110

Commission to Y=22,500/-
*3: -Calculation of share of profit of A’s, B’s, C’s, and D’s.
Profit Sharing Ratio = 1:1
Net Profit after Commission = 2,25,000

 Profit share of X’s=2,25,000 X 1/2
=1,12,500/-

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Profit share of Y’s=1,50,000 X 1/2
=1,12,500/-

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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

 

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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