Question 32 Chapter 3 - Unimax Class 12 Part 1 - 2021

Question 32 Chapter 3 – Unimax Class 12 Part 1

Table of Contents

The solution of Question 32 Chapter 3 – Unimax Class 12 Part 1:

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

32. A and B are partners sharing profit in proportion of 1/10th and 3/10th with capitals of Rs. 15000 and Rs. 10000 respectively as on 1st Jan., 2021. 5% interest was agreed to be calculated on the capital of each partner and B is to be allowed an annual salary of Rs. 2400 which has not been withdrawn. During the year 2021, A withdrew Rs. 1200 and B Rs. 2000 in anticipation of profits. Profits for the year prior to calculation of interest on capital but after charging B’s salary amounted to Rs. 8000. A provision of 8% of the profits after charging interest and salary but before charging any commission is to be made in respect of commission to A.
Show :
(1)The Profit and Loss Appropriation Account showing the allocation of profits.
(2)Partners’ Capital Accounts when Capitals are fluctuating.

The solution of Question 32 Chapter 3 – Unimax Class 12 Part 1:

Profit & Loss of Appropriation A/c For the year ended Dec. 31, 2021

Particulars		Rs.	Particulars	Rs.
To B’s salary	2400		By Net Profit (Before Charging Salary)	10400
To A’s Commission	540
To Interest on Capital
– A	750
– B	500	1250
To Profit transferred to capital A/c
– A	4347
– B	1863	6210

		10400		10400

Capital Accounts

Particulars	A	B	Particulars	A	B
To Balance c/d	19437	12763	By Balance b/d	15000	10000
To drawings A/c	1200	2000	By Interest on capital A/c	750	500
			By Commission A/c	540	–
			By Salary A/c	–	2400
			By Profit A/c	4347	1863
	20637	14763		20637	14763