Question 42 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 42 Chapter 2 of +2-A

Question 42 Chapter 2 of +2-A

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/-

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)

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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 42 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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