Question 3 Chapter 2 of Class 12 Part – 1 VK Publication

Question 3 Chapter 2 of Class 12 Part - 1 VK Publication
Question 3 Chapter 2 of Class 12 Part - 1 VK Publication

Question 3 Chapter 2 of Class 12 Part – 1

3. A and B were in partnership. They had agreed that interest on Capital be allowed @ 12% p.a. and interest be changed on the Drawings at the same rate . There was no other provision in their paternship deed. A presented the following Profit and Loss Appropriation Account:
Should B accept it? In case you don’t advise him to accept it , then , redraw it. Also give the necessary entry for the rectification.

The solution of Question 3 Chapter 2 of Class 12 Part – 1: –

The redrafted Profit and Loss Appropriation Account is given below:

Profit and Loss Appreciation Account

Particulars    Amount Particulars  Amount
To Interest on Capital A/c:     By Profit and Loss A/c 77,280
A 12,000      
B 6,000 18,000 By Interest on B’s Drawings 360
To Profit transferred to Capital A/cs        
A 29,820      
B 29,820 59,640    

  77,640   77,640

Notes: (i) Interest on drawings will be charged for an average period of six months.
(ii) No salary is allowed to partner A
(iii) Profit will be shared in equal ratio by partners

Adjustment Table

Particulars  Amount already received Amount ouggt to received
  Amount   Amount
Interest on Capitals 12,000 6,000 12,000 6,000
Salary 15,000 _ _ _
Share in Profit 30,000 15,000 28,820 29,820
  57,000 21,000 41,820 35,820
Less: Interest on Drawings _ 720 _ 360
  57,000 20,280 41,820 35,460
         
Amount ought to be received (Cr.) A B
Less: Amount already received (Dr.) 41.820 35,460
Amount to be Adjusted 57,000 20,280
Donations received from the donors for Building (15,180) (15,180)

Profit and Loss Appreciation Account

Particulars    Dr. Cr.
Adjustment Entry      
A’s Capital A/c Dr. 15,180  
To B’s Capital A/c     15,180
(Being partners capital accounts adjusted )      

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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)

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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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms 

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