Question 51 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 51 Chapter 7 of +2-A

Question 51 Chapter 7 of +2-A

51. X, Y and Z entered into partnership on 1st April, 2016. They contributed capital 40,000, 30,000 and 20,000 respectively and agreed to share profits in the ratio of 3 : 2 : 1. Interest on capital was to be allowed @ 15% p.a. and interest on drawings was to be charged at an average rate of 5%. During the two years ended 31st March, 2018, the firm made profit of 21,600 and 25,140 respectively before allowing or charging interest on capital and drawings. The drawings of each partner were 6,000 per year. On 31st March, 2018, the partners decided to dissolve the partnership due to difference of opinion. On that date, the creditors amounted to 20,000. The assets, other than cash 2,000, realised 1,21,000. Expenses of dissolution amounted to 760. Draw up necessary Ledger Accounts to close the books of the firm.

 

 

The solution of Question 51 Chapter  7 of +2-A: –

 

Profit and Loss Appropriation for
the year ended March 31, 2017

Particular 5
Amount Particular Amount
Interest on Capital A/c:   Profit and Loss A/c   21,600
X (40,000 × 15%) 6,000   Interest on Drawings    
Y (30,000 × 15%) 4,500   X (6,000 × 5%) 300  
Z (20,000 × 15%) 3,000 13,500 Y (6,000 × 5%) 300  
      Z (6,000 × 5%) 300 900
           
Profit transferred to:          
X’s Capital A/c 4,500        
Y’s Capital A/c 3,000        
Z’s Capital A/c 1,500 9,000      
    22,500     22,500

 

 

Partners’ Capital Accounts for the year 2016-17
Part. X Y Z

Part.

X Y Z
To Drawing A/c 6,000 6,000 6,000 By Cash A/c 40,000 30,000 20,000
To Interest on Drawings A/c 300 300 300 By Interest on Capital A/c 6,000 4,500 3,000
        By P/L Appropriation A/c (WN 3) 4,500 3,000 1,500
               
To Cash A/c 44,200 31,200 18,200        
  50,500 37,500 24,500   50,500 37,500 24,500

 

Profit and Loss Appropriation for
the year ended March 31, 2018

Particular 5
Amount Particular Amount
Interest on Capital A/c:   Profit and Loss A/c   25,140
X (40,000 × 15%)  6,630   Interest on Drawings    
Y (30,000 × 15%) 4,680   X (6,000 × 5%) 300  
Z (20,000 × 15%) 2,730 14,040 Y (6,000 × 5%) 300  
      Z (6,000 × 5%) 300 900
           
Profit transferred to:          
X’s Capital A/c 6,000        
Y’s Capital A/c 4,000        
Z’s Capital A/c 2,000 12,000      
    26,040     26,040

 

Partners’ Capital Accounts for the year 2017-18
Part. X Y Z

Part.

X Y Z
To Drawing A/c 6,000 6,000 6,000 By Cash A/c 40,000 30,000 20,000
To Interest on Drawings A/c 300 300 300 By Interest on Capital A/c 6,630 4,680 2,730
        By P/L Appropriation A/c 6,000 4,000 2,000
To Cash A/c 50,530 33,580 16,630        
  56,830 39,880 22,930   56,830 39,880 22,930
        By Balance b/d 50,530 33,580 16,630
        By Realization A/c Profit 750 500 250
To Cash A/c 51,280 34,080 16,880        
  51,280 34,080 16,880   51,280 34,080 16,880

 

 

 

Revaluation Account
Particular 5
Amount Particular Amount
Sundry Assets 1,18,740 Creditors   20,000
Cash A/c:     Cash Assets realized   1,21,000
Creditors 20,000        
Expenses 760 20,760      
           
           
Profit transferred to:          
X’s Capital A/c 750        
Y’s Capital A/c 500        
Z’s Capital A/c 250 1,500      
    1,41,000     1,41,000

 

Partners’ Capital Accounts
Part. X Y Z

Part.

X Y Z
        By Cash A/c 50,530 33,580 16,630
        By Realization A/c Profit 750 500 250
               
To Cash A/c 51,280 34,080 16,880        
  51,280 34,080 16,880   51,280 34,080 16,880

 

Cash Account
Particular
Amount Particular Amount
Balance b/d 2,000 Realization A/c   20,760
Realization A/c   1,21,000      
      X’s Capital A/c   51,280
      Y’s Capital A/c   34,080
      Z’s Capital A/c   16,880
    1,23,000     1,23,000


Working Note:

 

Memorandum Balance Sheet
Particular
Amount Particular Amount
Capital A/cs:   Cash   2,000
X’s Capital A/c 50,530   Sundry Assets   1,18,740
Y’s Capital A/c 33,580        
Z’s Capital A/c 16,630 1,00,740      
Creditors   20,000      
    1,20,740     1,20,740

 

 

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)

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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Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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