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

Question 52 Chapter 2 of +2-A
Question No.52 - Chapter No.2 - T.S. Grewal +2 Book 2019-Solution

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Question 52 Chapter 2 of +2-A

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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
AmountIncome
Amount
To Interest on Capital A/c *1  By Profit and Loss A/c33,360
Amal’s Capital A/c2,000   
Bimal’s Capital A/c1,500   
Kamal’s Capital A/c1,2504,750  
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/c7,388   
Bimal’s Current A/c7,388
   
Kamal’s Current A/c7,38722,163  
  33,360  33,360

 

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

ParticularsAmal Bimal Kamal
Particulars
Amal Bimal Kamal
    By Balance B/d40,00030,00025,000
    By Interest on Capital A/c *12,0001,5001,250
    By Salaries A/c3,000
    By Commission A/c *2985
    By P&L Appropriation A/c*47,3887,3887,387
To Balance c/d 52,38839,873
33,637
    
 52,38839,873
33,637
 52,38839,873
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 Capital40,000X5
100

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Interest on Amal’s Capital = 2,000/-

Interest on Bimal’s Capital30,000X5
100

Interest on Bimal’s Capital = 1,500/-

Interest on Kamal’s Capital25,000X5
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 ReserveProfit after expensesXRate
100 + Rate

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Amount of Reserve25,610X4
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

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Amount of Reserve24,625X10
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

 

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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