# Question 43 Chapter 2 of +2 Part-1 – USHA Publication 12 Class Part – 1

Q-43 - CH-2 - Usha +2 Book 2018 - Solution

Question 43 Chapter 2 of +2-Part-1

43. (Profit and loss adjustment a/c) On April 1, 2018 John and Robert commenced business as partners with an initial capital of Rs.20,000 and Rs.30,000 in their respective accounts. The partnership deed provided inter alia that
Profit/Loss shall be shared in the ratio of 2:3 as between John and Robert.
Partners shall be entitled to interest on capital at the commencement of each year at 6% p.a. and
Interest on drawings shall be charged at 8% p.a.
During the year ended 31-3-2019, the firm made a profit of Rs.19,280 before adjustment of interest on capital and drawings. The partners withdrew during the year Rs.3,000 each at the end of every quarter commencing from 30-6-2018.
You are required to open a profit and loss adjustment account.

### The solution of Question 43 Chapter 2 of +2 Part-1: –

 Profit and Loss Account A/c Particulars Amount Particulars Amount To Interest on capital – John 1,200 By Profit b/d 19,280 -Robert 1,800 3,000 By interest on drawings: -John 360 -Robert 360 720 To Net profit transferred to Capital a/cs -John 6,800 -Robert 10,200 17,000 20,000 20,000

(a)If capitals are fluctuating :

 Profit and Loss Account A/c Particulars John Robert Particulars John Robert To Drawings A/c 12,000 12,000 By Profit b/d 20,000 30,000 To Interest on Drawings A/c 360 360 By Interest on Capital A/c 1,200 1,800 By P&L Adjustment A/c 6,800 10,200 To Balance c/d 15,640 29,640 28,000 42,000 28,000 42,000

Working Note: –

Calculation of Interest on A’s Drawings:
We will do it with the product method because of partner withdrawal a different amount every time.

 Date Amount(A) Period Left after(B) Product(C=A*B) 30-6-18 3,000 9 27,000 30-9-18 3,000 6 18,000 31-1218 3,000 3 9,000 31-3-19 3,000 0 0 Sum of Product 54,000

 Interest on Drawing = 54,000 X 8 X 1 100 12 Interest on Drawing = 360/-

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –