Question 45 Chapter 2 of Class 12 Part – 1
45. Y and Z are partners sharing profits and losses in the ratio of 2:1 with capitals Rs. 5,00,000 and Rs. 2,50,000 respectively. Show distribution of profits in each of the following cases:
(i) Partnership deed does not provide for interest on capital and profit is Rs. 37,500
(ii) Partnership deed provides for interest on capital at 5% pa. and losses for the year are Rs. 37,500.
(iii) Partnership deed provides for interest on capital at 5% p.a. and profits for the year are Rs. 39,000.
(iv) Partnership deed provides for interest on capital at 5% p.a. and profits for the year are Rs. 36,000
(v) Partnership deed provides for interest on capital at 5% p.a. even if it involves the in loss and profits for the year are Rs. 36,000.
The solution of Question 45 Chapter 2 of Class 12 Part – 1: –
Profit and Loss Appreciation Account
| Particulars |
Amount | Particulars |
Amount | |
| To Profit Transferred to Partners’ Capital A/C: | By Profit And Loss A/C | 37,500 | ||
| Y | 25,000 | |||
| Z | 12,500 | 37,500 | ||
| 37,500 | 37,500 | |||
Since the Partnership Deed is silent with regard to interest on capital, according to Section 13 of the Partnership Act, 1932, no interest on capital will be allowed on the capitals of the Hence, it is not allowed in this case.
Case (ii)
Profit and Loss Appreciation Account
| Particulars |
Amount | Particulars |
Amount | |
| To Profit And Loss A/C (Loss): | 37,500 | By Loss Transferred to Partners’ Capital A/C | ||
| Y | 25,000 | |||
| Z | 12,500 | 37,500 | ||
| 37,500 | 37,500 |
Interest on Capital Is not provided since there is a loss.
Case (iii)
Profit and Loss Appreciation Account
(For the year ended 31st March, 2018)
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| Particulars |
Amount | Particulars |
Amount | |
| To Interest On Capital A/C: | By Profit And Loss A/C | 39,000 | ||
| Y | 25,000 | |||
| Z | 12,500 | 37,500 | ||
| To Profit Transferred To Capital A/C’s | ||||
| Y | 1,000 | |||
| Z | 500 | 1,500 | ||
| 39,000 | 39,000 | |||
Case (iv)
Profit and Loss Appreciation Account
| Particulars |
Amount | Particulars |
Amount | |
| To Interest On Capital A/C: | By Profit And Loss A/C | 36,000 | ||
| Y | 24,000 | |||
| Z | 12,000 | 36,000 | ||
| 36,000 | 36,000 | |||
The available profit is Rs, 36,000 whereas the interest on capital is Rs. 37,500 ( 25,000+ 12,500). Since the profit is less than the interest , the available profit will be distributed in capita; ratio or ratio of interest on capital ( both being the same)
Case (v)
Profit and Loss Appreciation Account
| Particulars |
Amount | Particulars |
Amount | ||
| To Interest On Capital A/C: | By Profit And Loss A/C | 36,000 | |||
| Y | 25,000 | By Loss Transferred to Partners’ Capital A/C | |||
| Z | 12,500 | 37,500 | Y | 1,000 | |
| Z | 500 | 1,500 | |||
| 37,500 | 37,500 | ||||
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Also, Check out the solved question of all Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
Chapter No. 1 – Accounting Not for Profit Organisations
Chapter No. 2 – Partnership Accounts – I (Introduction)
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Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Chapter No. 8 – Company Accounts (Share Capital)
Chapter No. 9 – Company Accounts (Issue of Debentures)
Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
Chapter No. 1 – Financial Statements of a Company
Chapter No. 2 – Financial Statement Analysis
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Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 4 – Ratio Analysis
Chapter No. 5 – Cash Flow Statement
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