# Question 46 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 46 Chapter 2 of +2-A

46. A and B are partners sharing profits and losses in the ratio of 3: 1. On 1st April 2018, their capitals were: A 50,000 and B 30,000. During the year ended 31st March 2019, they earned
a net profit of 50,000. The terms of a partnership are:

Interest on capital is to allowed @ 6% p.a.
A will get a commission @ 2% on turnover.
B will get a salary of 500 per month.
B will get a commission of 5% on profits after deduction of all expenses including such commission.
Partners’ drawings for the year were: A 8,000 and B 6,000. Turnover for the year was 3,00,000.
After considering the above facts, you are required to prepare Profit and Loss Appropriation Account and Partners’ Capital Accounts

The solution of Question 46 Chapter 2 of +2-A

:

 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 50,000 A’s Capital A/c 3,000 B’s Capital A/c 1,800 4,800 To B’s Salary A/c 500 X 12 6,450 To Partner’s Commission A/c *2 A’s Capital A/c 6,000 B’s Capital A/c 1,581 7,581 To Profit Transferred to *3 A’s Capital A/c 23,714 B’s Capital A/c 7,905 31,619 50,000 50,000

 Partners’ Capital Accountsfor the year ended 31st March 2019 Particulars Sajal Kajal Particulars Sajal Kajal To Drawings A/c 8,000 6,000 By Balance B/d 50,000 50,000 By Interest on Capital A/c *1 3,000 1,800 By Commission A/c 6,000 1,581 By Salary A/c – 6,000 By P/L Appropriation A/c 23,714 7,905 To Balance c/d 74,714 41,286 82,714 47,286 82,714 47,286

Working Note: –

*1 Calculation of Interest on A’s & B’s Capital
Interest on Capital= Opening Capital X Rate of Interest

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

Interest on A’s Capital  = 3,000/-

 Interest on B’s Capital = 30,000 X 6 100

Interest on B’s Capital  = 1,800/-

*2 Calculation of Commission to Partners

 Commission to A = 2% on Turnover Turnover = 3,00,000
 Commission to A = 3,00,000 X 2 100

Commission to A = 6,000/-

 Commission to B = 5% on Profits after all Expense including such Commission Profit after all Expense = 50,000 − 4,800 − 6,000 − 6,000 = Rs 33,200
 Commission to B = Profit after all Expense X Rate 100 + Rate
 Commission to B = 33,200 X 5 100 + 5
 Commission to B = 33,200 X 5 105

Commission to B = 1,581/- (app.)

*3: -Calculation of share of profit of A’s & B’s

Profit-Sharing Ratio = 3: 1
Net Profit after interest & Salary = 31,619

 Profit share of A = 31,619 X 3/4 Profit share of A = 23,714/-

 Profit share of B = 31,619 X 1/4 Profit share of B = 7,905/-

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