Question 5 Chapter 2 - Unimax Class 12 Part 1 - 2021

Question 5 Chapter 2 – Unimax Class 12 Part 1

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The solution of Question 5 Chapter 2 – Unimax Class 12 Part 1:

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

5. On 1st January, 2021 A and B entered into partnership contributing Rs. 60000 and Rs. 40000 respectively. They agreed to share profits and losses in ratio of 3:2. B is allowed annual salary of Rs. 6000. Interest on their respective Capitals are Rs. 6000 and Rs. 4000. During the year, A withdrew Rs. 5000 and B Rs. 10000 as Drawings. Interest on drawings of A and B is Rs. 150 and Rs. 300 respectively. Profit for year ended December 31, 2021 before above mentioned adjustments was Rs. 50000. Show distribution of profit by preparing Profit and Loss Appropriation Account of the firm.

The solution of Question 5 Chapter 2 – Unimax Class 12 Part 1:

Profit & Loss Appropriation Account For the year ended Dec. 31, 2006.

Particulars		Rs.	Particulars		Rs.
To B’s Capital A/c (Salary)		6000	By Net Profit		50000
To Interest on Capital A/c			By Interest on drawings :
– A	6000		– A	150
– B	4000	10000	– B	300	450
To Profit transferred to Capital A/c
– P	20670
– Q	13780	34,450
		50,450			50,450