Question 46 Chapter 2 of +2-Part-1
46. (Profit and loss Appropriation a/c, Fixed and Fluctuating Capital a/c’s) On 1st April, 2016 A and B entered in a partnership contributing Rs.24,000 and Rs.10,000 respectively. According to the deed, the interest on capital is to be allowed and on drawings to be charged @15% p.a. A and B shall receive a monthly salary of Rs.2,000 each. A is entitled to 2/5 of profits. During the year, the following transactions took place:
(a) On 1st October, 2016 A withdrew (on permanent basis)Rs.8,000 from his capital and B introduced Rs.4,000 as additional capital.
(b) The drawings of A and B were Rs.12,000 each drawn at different intervals of time and the interest corresponding to these drawings were Rs. 675 and Rs.450 respectively.
(c) The profit for the year before any adjustment is made was Rs.60,000.
Prepare the profit and loss appropriation account and the necessary accounts assuming that:
(i) The capitals are fluctuating.
(ii) The capitals are fixed.
The solution of Question 46 Chapter 2 of +2 Part-1: –
| Profit and Loss Account A/c |
|||||
| Particulars |
Amount | Particulars |
Amount | ||
| To Interest on capital – A | 3,000 | By Profit b/d | 60,000 | ||
| -B | 1,800 | 4,800 | By interest on drawings: | ||
| To salary- A | 24,000 | -A | 675 | ||
| -B | 24,000 | 48,000 | -B | 450 | 1,125 |
| To Net profit transferred to Capital a/cs | |||||
| -A (3/5) | 4,995 | ||||
| -B (2/5) | 3,330 | 8,325 | |||
| 61,125 | 61,125 | ||||
(a)If capitals are fluctuating :
| Profit and Loss Account A/c |
|||||||
| Particulars |
A | B | Particulars |
A | B | ||
| To Cash A/c | 8,000 | – | By Balance B/d | 24,000 | 10,000 | ||
| To Drawings A/c | 12000 | 12000 | By Cash | – | 4,000 | ||
| To Interest on Drawings A/c | 675 | 450 | By Interest on Capital A/c | 3,000 | 1,800 | ||
| By Salary | 24,000 | 24,000 | |||||
| By P&L Appropriation A/c | 4,995 | 3,330 | |||||
| To Balance c/d | 35,320 | 30,680 | |||||
| 55,995 | 43,130 |
55,995 | 43,130 | ||||
(b)If capitals are fixed :
| Profit and Loss Account A/c |
|||||||
| Particulars |
A | B | Particulars |
A | B | ||
| To Cash A/c | 8,000 | – | By Balance B/d | 24,000 | 10,000 | ||
| By Cash | – | 4,000 | |||||
| To Balance c/d | 16,000 | 14,000 | |||||
| 24,000 | 14,000 |
24,000 | 14,000 | ||||
| Profit and Loss Account A/c |
|||||||
| Particulars |
A | B | Particulars |
A | B | ||
| To Drawings A/c | 12,000 | 12,000 | By Interest on Capital A/c | 3,000 | 1,800 | ||
| To Interest on Drawings A/c | 675 | 450 | By Salary | 24,000 | 24,000 | ||
| By P&L Appropriation A/c | 4,995 | 3,330 | |||||
| To Balance c/d | 19,320 | 16,680 | |||||
| 31,995 | 29,130 |
31,995 | 29,130 | ||||
Working Note: –
Calculation of Interest on partners’ Capital:
| Amount |
|
| A | |
| On 24,000 for ½ year: | 1,800 |
| On 16,000 for ½ year: | 1,200 |
| 3,000 | |
| Amount |
|
| B | |
| On 10,000 for ½ year: | 750 |
| On 14,000 for ½ year: | 1,050 |
| 1,800 |
Thanks, Please Like and share with your friends
Comment if you have any questions.
Also, Check out the solved question of previous 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)
- 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
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
