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

Question No.51 Chapter No.7 - T.S. Grewal +2 Book 2019-Solution

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)

• 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