Question 42 Chapter 2 of +2-A - T.S. Grewal 12 Class Part

Question 42 Chapter 2 of +2-A

Table of Contents

The solution of Question 42 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)

42. C and D are partners in a firm; C has contributed 1,00,000 and D 60,000 as capital. Interest is payable @ 6% p.a. and D is entitled to a salary of 3,000 per month. In the year ended 31st March 2019, the profit was 80,000 before interest and salary. Divide the amount between C and D.

The solution of Question 42 Chapter 2 of +2-A:

Profit and Loss Appropriation Account for the year ended 31st March 2019
Expenditure		Amount	Income	Amount
To Salary to D A/c			By Profit and Loss Adjustment A/c	80,000
3,000 X 12		36,000
To Interest on Capital A/c *1
C’s Capital A/c	6,000
D’s Capital A/c	3,600	9,600
*To Profit Transferred to 2**
C’s Capital A/c	17,200
D’s Capital A/c	17,200	34,400
		80,000		80,000

Working Note: –

*1: -Calculation of Total Interest on C’s Capital, and D’s Capital
Interest on Capital = Capital X Rate of Interest X Period
Rate of Interest = 6%
Period = Whole year(So we don’t need to add period in the formula)
C’s Capital = 1,00,000
Interest on C’s Capital = 1,00,000 X 6/100
Interest on C’s Capital = 6,000/-

D’s Capital = 60,000
Interest on D’s Capital = 60,000 X 6/100
Interest on D’s Capital = 3,600/-

*2: -Calculation of share of profit of Ashish’s and Aakash’s
Profit-Sharing Ratio = 1: 1
Net Profit after interest & Salary = 34,400
profit share of C = 34,400 X 1/2
Profit share of C = 17,200/-

Profit share of D = 34,400 X 1/2
Profit share of D = 17,200/-

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Comment if you have any questions.

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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