Question 52 Chapter 2 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 52 Chapter 2 of +2-A

Question 52 Chapter 2 of +2-A

52. Amal, Bimal and Kamal are three partners. On 1st April, 2018, their Capitals stood as: Amal
40,000, Bimal 30,000 and Kamal 25,000. It was decided that:
a they would receive interest on Capital @ 5% p.a.,
b Amal would get a salary of 250 per month,
c Bimal would receive commission @ 4% on net profit after deducting commission, interest on capital and salary, and
d After deducting all of these 10% of the profit should be transferred to the General Reserve. Before the above items were taken into account, net profit for the year ended 31st March, 2019 was 33,360. Prepare Profit and Loss Appropriation Account and the Capital Accounts of
the Partners.

 

The solution of Question 52 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   33,360
Amal’s Capital A/c 2,000        
Bimal’s Capital A/c 1,500        
Kamal’s Capital A/c 1,250 4,750      
To Amal’s Salary A/c   12,000      
To Commission to Bimal A/c *2   985      
To General Reserve A/c *3   2,462      
To Profit Transferred to *4          
Amal’s Current A/c 7,388        
Bimal’s Current A/c 7,388
       
Kamal’s Current A/c 7,387 22,163      
    33,360     33,360

 

 

   Partners’ Capital Accounts
     for the year ended 31st March 2019

Particulars Amal Bimal Kamal
Particulars
Amal Bimal Kamal
        By Balance B/d 40,000 30,000 25,000
        By Interest on Capital A/c *1 2,000 1,500 1,250
        By Salaries A/c 3,000
        By Commission A/c *2 985
        By P&L Appropriation A/c*4 7,388 7,388 7,387
To Balance c/d 52,388 39,873
33,637
       
  52,388 39,873
33,637
  52,388 39,873
33,637

 

Working Note: –

*1 Calculation of Interest on Amal’s, Bimal’s, & Kamal’s Capital
Interest on Capital = Opening Capital X Rate of Interest

Interest on Amal’s Capital 40,000 X 5
100

Interest on Amal’s Capital = 2,000/-

Interest on Bimal’s Capital 30,000 X 5
100

Interest on Bimal’s Capital = 1,500/-

Interest on Kamal’s Capital 25,000 X 5
100

Interest on Kamal’s Capital = 1,250 /

*2 Calculation of Commission to Bimal
Net Profit after interest & Salary = 30,000
Distribution of profit in the ratio of 5:3:2

Commission to Bimal = 4% on Net Profits after Commission
Profit after expenses = Profit – Interest on Capital – Salaries to Partners
  = 33,360 – 4,750 – 3,000 = Rs 25,610
Amount of Reserve Profit after expenses X Rate
100 + Rate
Amount of Reserve 25,610 X 4
104

Amount of Reserve = 985/-

*3 Calculation of Amount to be transferred to Reserve

Amount for Reserve = 10% of Divisible Profit
Divisible Profit = Profit + Interest on Drawings − Interest on Capital
  = 33,360 – 4,750 – 3,000 – 985 = Rs 24,625

 

Amount of Reserve 24,625 X 10
100

Amount of Reserve = 24,62/-

*4: -Calculation of share of profit of Amal’s, Bimal’s, & Kamal’s
Net Profit after interest & Salary = 22,163
Distribution of remaining profit in the ratio of 1:1:1

Profit share of Amal = 22,163 X 1/3
Profit share of Amal = 7,388/-
Profit share of Bimal = 22,163 X 1/3
Profit share of Bimal = 7,388/-
Profit share of Kamal = 22,163 X 1/3
Profit share of Kamal = 7,387/-

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)

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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 52 Chapter 2 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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