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

Question 3 Chapter 2 of Class 12 Part – 1

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

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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

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Adjustment Table

Particulars	Amount already received		Amount ouggt to received
Particulars		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