Question 36 Chapter 2 of +2-A - T.S. Grewal 12 Class Part

Question 36 Chapter 2 of +2-A

Table of Contents

The solution of Question 36 Chapter 2 of +2-A:

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

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

36. Ram and Mohan are partners in a business. Their capitals at the end of the year were 24,000 and 18,000 respectively. During the year, Ram’s drawings and Mohan’s drawings were 4,000 and 6,000 respectively. Profit before charging interest on capital during the year was 16,000. Calculate interest on capital @ 5% p.a. for the year ended 31st March 2019.

The solution of Question 36 Chapter 2 of +2-A:

Calculation of Interest on Long’s and Mohan’s Capital by Simple Method

Period	Amount of Long’s Capital	Amount of Short’s Capital
Capital at the end	1,20,000	1,40,000
Less: Profit already Distributed (1: 1)	25,000	25,000
Add: Drawings During the year	40,000	50,000
Capital at the beginning	1,35,000	1,65,000

Interest on Capital = Opening Capital X Rate of Interest

Interest on Long’s Capital	=	1,35,000	X	8
				100

Interest on Long’s Capital = 10,800/-

Interest on Mohan’s Capital	=	16,000	X	8
				100

Interest on Mohan’s Capital = 750/-

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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)

Chapter No. 8 – Company Accounts – Accounting for Share Capital
Chapter No. 9 – Company Accounts – Issue of Debentures
Chapter No. 10 – Redemption of Debentures

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

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