# Question 45 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 45 Chapter 2 of +2-A

45. Sajal and Kajal are partners sharing profits and losses in the ratio of 2: 1. On 1st April 2018
their Capitals were: Sajal – 50,000 and Kajal – 40,000.
Prepare Profit and Loss Appropriation Account and the Partners’ Capital Accounts at the end of the year after considering the following items:
Interest on Capital is to be allowed @ 5% p.a.
Interest on the loan advanced by Kajal for the whole year, the amount of loan is 30,000.
Interest on partners’ drawings @ 6% p.a. Drawings: Sajal 10,000 and Kajal 8,000.
10% of the divisible profit is to be transferred to Reserve.

Net profit for the year ended 31st March 2019 is 68,460.
Note: Net profit means net profit after the debit of interest on the loan by the partner.

The solution of Question 45 Chapter 2 of +2-A

:

 Profit and Loss Appropriation Account for the year ended 31st March 2019 Particulars Amount Particulars Amount To Interest on Kajal’s loan@ 6% p.a 1,800 By Net Profit before interest A/c 70,260 To Profit and Loss Appropriation A/c 68,460 2,20,700 2,20,700

 Profit and Loss Appropriation Account for the year ended 31st March 2019 Expenditure Amount Income Amount To Interest on Capital A/c *1 By Profit and Loss A/c 68,460 Sajal’s Capital A/c 2,500 To Interest on Capital A/c *2 Kajal’s Capital A/c 2,000 4,500 Sajal’s Capital A/c 300 To Reserve A/c *3 6,450 Kajal’s Capital A/c 240 540 To Profit Transferred to *4 Sajal’s Capital A/c 38,700 Kajal’s Capital A/c 19,350 58,050 2,20,700 2,20,700

 Partners’ Capital Accountsfor the year ended 31st March 2019 Particulars Sajal Kajal Particulars Sajal Kajal To Drawings A/c 10,000 8,000 By Balance B/d 50,000 40,000 To Interest on Drawings A/c 300 240 By Interest on Capital A/c *1 2,500 2,000 By P&L Appropriation A/c 38,700 19,350 To Balance c/d 80,900 53,110 91,200 61,350 91,200 61,350

Working Note: –

*1 Calculation of Interest on Sajal’s & Kajal’s Capital by Simple Method
Interest on Capital= Opening Capital X Rate of Interest

 Interest on Sajal’s Capital = 50,000 X 5 100

Interest on Sajal’s Capital = 2,500/-

 Interest on Kajal’s Capital = 20,000 X 5 100

Interest on Kajal’s Capital = 2,000/-

*2 Calculation of Interest on Sajal’s & Kajal’s Drawing

Interest on Drawing = Drawing X Rate of Interest X Period

 Interest on Drawing = 10,000 X 6 = 6 100 12

Interest on Sajal’s Drawing = 300/-

 Interest on Drawing = 8,000 X 5 = 6 100 12

Interest on Kajal’s Drawing = 2,400/-

Note: – No period is given we assume it during the year as per provision of chapter

*3 Calculation of Amount to be transferred to Reserve

 Amount for Reserve = 10% of Divisible Profit Divisible Profit = Profit + Interest on Drawings − Interest on Capital = 68,460 + 540 − 4,500 = Rs 64,500
 Amount of Reserve = 64,500 X 10 100

Amount of Reserve = 6,450/-

 Interest on Kajal’s Drawing = 8,000 X 5 = 6 100 12

Interest on Kajal’s Drawing  = 2,400/-

*4: -Calculation of share of profit of Sajal’s & Kajal’s

Profit-Sharing Ratio = 2: 1
Net Profit after interest & Salary = 58,050

 Profit share of Sajal = 58,050 X 2/3 Profit share of Sajal = 38,700/-

 Profit share of Kajal = 58,050 X 1/3 Profit share of Kajal = 19,350/-

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. 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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